EU Anti-dumping Duties "Unwarranted": Chinese Bicycle Makers

Chinese bicycle makers on July 19, 2011 condemned the proposed extension of the anti-dumping duties on their products as "unwarranted," urging the European Union (EU) to drop the 18-year-old duties.

Representatives from the China Chamber of Commerce for Machinery and Electronic Products (CCCME) and the China Bicycle Association (CBA) arrived in Brussels on July 18, 2011 for a hearing with the European Commission on the issue.

"The proposal of the European Commission to extend the duties for another three years is totally unwarranted," Senior Commissioner for CCCME Zhang Peisheng told reporters at a press conference here on on July 19, 2011.

Zhang said that Chinese bicycle imports into the EU had decreased by 38 percent during the three year review investigation period, and at the same time, their average prices had risen by an enormous 125 percent since 2007.

"Based on these two trends alone, it is impossible to agree that Chinese bicycles have caused any injury to the EU bicycle industry. This simply defies the basic laws of economics," Zhang explained.

The EU has imposed anti-dumping duties on imports of bicycles originating in China since 1993 following the allegation of the European Bicycle Manufacturers Association (EMBA) that Chinese bicycle producers were dumping in the EU and squeezing them out of the market.

The duties were previously rolled over twice, first in 2000 and again in 2005 following affirmative findings of the European Commission through expiry review investigations, making them one of the longest EU anti-dumping measures against Chinese products.

The duty rate, initially set at 30.6 percent, was raised to 48.5 percent in 2005.

The European Commission's proposal found that the EU industry' profitability was considerable lower than the previous review investigation back in 2005, ranging from 0.6 percent to 2.2 percent.

However, the CCCME and the CBA rigourously dispute that this is because of Chinese bicycle imports.

"During the review investigation period, and especially in 2008 and 2009, Chinese bicycle import volumes were at their lowest levels for many years," said Guo Haiyan from the CBA. "Yet the EU industry moved into negative profitability for the first time in 10 years."

"This shows that there is absolutely no relationship between Chinese imports and the situation of the EU bicycle industry," Guo said. Both kinds of bicycles, she said, are sold in different market segments in the EU.

The European Commission's analysis also confirms that Chinese market share of bicycle sales in the EU is now at its lowest level for several years at 3.0 percent.

And the loss of Chinese bicycle market share in the EU did not benefit EU industry either.

Eric Jiang of Jurisino Law Firm in Beijing, one of the lawyers representing the Chinese manufacturers, said "The space left by Chinese bicycles was filled by imports from non-EU countries like Thailand and Sri Lanka."

"This shows that there is little if any competitive overlap between EU-made bicycles and Chinese ones," Jiang said.

Dr Robert MacLean of Squires Sanders Hammonds, another law firm appointed to assist the Chinese producers, said that obviously the EU industry did not make good use of the protection granted by the European Commission for 18 years to adapt itself to global competition.

The Chinese delegation also complained the lack of transparency of the hearing with the European Commission. Jiang said that no one kept records of what the Chinese delegation said and the hearing was just for effect compared with those conducted in the United States and Canada.

The European Commission will put its proposal for a vote by EU member states next week. If approved, the Chinese bicycle industry would face punitive duties for another three years at least.