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Antidumping and competition : the case of China Zeng, Hang

Abstract

Economic liberalization and institutional changes generated by reforms in China are significantly reshaping the country from a planned to a market economy. The unprecedented expansion of China's trade industry has created many conflicts, among which antidumping ranks highest in priority. For over a century, the antidumping system has been a part of national laws to counter cross-border price discrimination and to protect domestic industries from cheap imports. The increasingly frequent use of antidumping measures has attracted a lot of criticism that points towards the controversial nature of antidumping legislation. This paper will explore the issue of competition in the execution of antidumping procedures from a legal and social economic perspective. While antidumping is allegedly aimed at protecting fair competition in the domestic market, the fact that it is a trade remedy makes this claim doubtful. In this paper, competition policy is introduced to compare it with the antidumping system in this regard. The interface is examined on an international dimension. The way in which antidumping and competition interact and the solution to their conflict are key determinants in forming a free trade environment. Noticeably, China has been the world's number one antidumping target. China's fast growing exports, low prices, and business practices, coupled with the increasing protectionism of some industries in certain countries have brought China under the spotlight of antidumping applications. China, on the other hand, has started applying its own antidumping procedures. The relationship between antidumping and competition is highlighted in the case of China. On one hand, antidumping charges against China in various countries show signs of foreign companies' attempts to eliminate competition from Chinese exports. On the other hand, antidumping cases initiated in China also show tension between antidumping and competition. This, however, has not stimulated enough attention in China. The country's rapid integration into free trade agreements might bring the issue onto the national stage. Chinese antidumping and competition legislation will be examined to give my audience a clear legal framework. However, the fact that China has yet to establish an antitrust system has left the competition issue ambiguous. Recommendations have been made to Chinese legislators, governments, and competitors in dealing with the issue.

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