As previously reported in this blog, China last month found that non-market economy conditions exist in the US energy and petrochemical sector, and accordingly swapped out US exporters’ costs in calculating the dumping margin for US n-propanal exporters (“The US is now a non-market economy – anti-dumping ruling by China”, 18 July 2020). This was a significant development, as China was for the first time adopting a methodology for disregarding distorted input prices that has become current in other AD authorities.
China has now initiated an AD investigation on exports of another US petrochemical product, Polyphenylene Oxide, which includes similar allegations of non-market conditions. China has also initiated a countervail investigation on the same product, and I am told that the 145 alleged subsidies include many of the same programs investigated in the n-propanal AD case and alleged in the parallel AD investigation. Thus, the issue whether government interventions are properly addressed by AD, CVD or both, once again presents itself.
More generally, the US has been the target of 8 out of 14 Chinese CVD investigations over the years, with the remaining cases targeting the EU, India and Australia. Given that the United States has led the charge against Chinese industrial subsidies, it may perhaps be asked whether this is pure coincidence, or reflects a conscious policy choice by the Chinese government. In any event, it once again confirms, should any such confirmation be necessary, that all countries are potentially affected by subsidy rules.
News flash – Since I wrote this post, China has initiated yet another AD investigation involving NME allegations, this one involving wine from Australia. It may be worth noting that Australia was a pioneer of the “particular market situation” methodology.
My thanks to Zhiguo Yu for the information underlying this post.
