The Reasons for and the Impact of Antidumping Protection: The Case of People's Republic of China
Over the past few decades, the liberalization in international trade has progressed at a rapid speed. While tariffs and quotas have been and continue to be reduced, another type of trade barrier, antidumping, is being used more and more frequently as a measure of protection. This paper focuses on the case of China, explores the characteristics, the reasons for and implications of antidumping. China is the largest targeting economy of antidumping (AD) trade disputes and there is evidence that China is more susceptible to antidumping than other economies, even after controlling for factors such as the non-market economy (NME) status. Our paper analyzes the reasons for China being so broadly and intensively targeted. In particular, the domestic characteristics of exports structure and industrial structures are examined. Our analysis also reveals that foreign direct investment (FDI) may be a significant factor explaining AD cases against China. There is also evidence that low concentration ratios in Chinese industries have contributed to the competitive price and low profit margins. An earlier draft of this paper was presented at the APEC Capacity-Building Workshop on Quantification of NTMs and Trade Facilitation, October 8-10, 2003, in Bangkok, Thailand.
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