The reporter recently conducted a statistic on the news of China-related trade frictions announced on the website of the Ministry of Commerce. As a result, a surprising phenomenon was discovered: From January to August this year, there were more than 70 trade friction cases in various countries in China, among which there were more than 40 cases of trade frictions with developing countries in China, accounting for more than half. Not only that. From the quantitative point of view, from January to August this year, chemical trade frictions involving China from developing countries amounted to the total number of trade frictions in developing countries last year.
In the global economic integration, why do developing countries "fail" with us?
Traditional allies have become the main force of friction. The reporter found that more than 70 industries involved in trade frictions in developing countries involved industries such as chemical engineering, light industry, and metallurgy. It involved 16 chemical related fields.
On February 2nd, Mexico decided to impose anti-dumping duties on sodium hexaphosphate native to China;
On February 7, India decided to impose anti-dumping duties on barium carbonate originating in China;
On April 6, Brazil launched an anti-dumping investigation against citrate and citrate native to China;
On May 2, India decided to impose anti-dumping duties on PVC paste resin originating in China;
On May 3, India decided to impose anti-dumping duties on sodium tripolyphosphate native to China;
On May 3, Turkey decided to continue imposing a five-year anti-dumping duty on pentaerythritol originating in China;
On May 10, India decided to impose anti-dumping duties on tetrafluoroethane originating in China;
On May 11, India decided to continue to impose anti-dumping duties on rubber auxiliaries originating in China or imported from China.
On June 8, Brazil launched an anti-dumping investigation on polydiphenylmethane diisocyanate (polymerized MDI) imported from China;
On June 17, India decided to continue to impose anti-dumping duties on sodium formaldehyde sulfoxylate originating in China;
On June 22, Argentina decided to impose different anti-dumping duties on tires, buses, or truck tires for travel car tires, agricultural or forestry machinery or vehicles originating in China;
On July 6, Pakistan decided to impose anti-dumping duties on hydrogen peroxide originating in China;
On July 25, India decided to continue levying anti-dumping duties on PTFE produced in China;
On July 26, India decided to impose anti-dumping duties on polyvinyl chloride resin originating in China;
On August 5, India decided to extend anti-dumping duties on sodium formaldehyde sulfoxylate originating in China;
On August 8, Thailand launched an anti-dumping investigation on rubber products for motorcycles originating in China.
It is understood that chemical industry has become a serious disaster area. This is an indisputable fact. Since the 1990s, foreign chemical trade frictions against China have started to climb. From 1995 to 2008, among the top 10 countries (regions) where chemical products encountered anti-dumping investigations, 7 countries (regions) belong to the Asian region. Among them, China ranks first. However, there is a new change. Before the financial crisis, the United States and the European Union were the main countries and regions where chemical trade frictions occurred with China. After the financial crisis, trade friction between developing countries and China began to become more frequent. Our traditional allies have now become our country’s new rivals in trade frictions. Although the opponent has changed, the chemical products involved in the friction have not been changed. Most of them are products with excessive capacity and low added value in China.
A direct conflict between economic interests Developing countries have always been our country's close brothers. Why do we not "have troubles" with us now?
Experts said that urging traditional allies to stand on the opposite side is a great concern for future competition. China's chemical products are highly dependent on exports. After the financial crisis, China’s traditional trade export markets in Europe and the United States have slowed their economic growth and demand has shrunk. As a result, Chinese companies have begun to do everything possible to open the markets of developing countries. The industrial structure of developing countries is similar to that of China. The large increase in Chinese products has made these developing countries feel that their own pillar industries have been impacted. Originally, they thought that China had overtaken their foreign markets—developed countries and regional markets. Now that Chinese products have increased their exports to developing countries, their enterprises are also facing the impact of the domestic market.
The reporter learned that the reasons for the increase in chemical trade friction between China and the developing countries include the following three aspects:
First, China's low-value-added chemical products have excess capacity. According to statistics from the relevant departments on the production of 38 basic chemical products in the petrochemical industry in China, except for the fifth and sixth place in the global output of engineering plastics and potash fertilizers, all other products rank among the top three, and the output of more than 20 kinds of products ranks first in the world. Nitrogen, phosphate, sulfuric acid, soda ash, methanol, synthetic rubber, synthetic resin, polyvinyl chloride, calcium carbide, pesticides, tires and other products are among the highest in the world.
The world's largest production capacity is brought about by the enormous problems of excess capacity. Domestic digestion can not, companies can only seek export at low prices. It is understood that at present, China's caustic soda, soda ash and other industries have accounted for more than 20% of domestic output, dye exports accounted for more than 40%, tire exports accounted for more than 50%, glyphosate exports accounted for more than 80%, citric acid exports accounted for 90 %the above.
"An obvious feature is that China's chemical industry is protected by the dense areas of foreign trade, it is precisely the industry with serious excess capacity." A person in charge of the China Petroleum and Chemical Industry Federation pointed out.
The second is that the developing countries and China's chemical industry structure and product quality are similar. Chang Yuzhi, a researcher in the chemical industry of China Investment Advisors, pointed out that most of the chemical products involved in the case in China are chemical raw materials. These products are trade surplus products in China's foreign trade of chemical products. These products are all labor-intensive products with low processing levels and low product prices. The growth mode is still dominated by volume growth. China has long been exporting at a low price. The complementary relationship with developed countries is different. China and developing countries have great convergence in product structure. The dominant products are all concentrated in the low-end products of the chemical industry chain. Their low technological content may easily lead to vicious competition and products. The price war has caused trade frictions.
Third, China's exports of chemical products from the European, American and Japanese countries to the developing countries have exacerbated the friction. Chang Zhizhi stated that in the current “post-financial crisis eraâ€, the European and American markets are in short supply and short-term recovery is unlikely. Chinese enterprises adopt market diversification strategies, and many products have been exported to developing countries in large quantities, making their domestic industries Feeling of increased pressure for competition. With the increase of China’s export volume, the number of frictions has also increased.
“In the past, Chinese companies often held the idea of ​​“exporting to developing countries, exporting, and not exporting, anyway, the European and American markets were big.†Now, after the financial crisis, the external demand of European and American markets has been sluggish. Domestic companies have placed their orders on emerging markets. There is great hope.†Chang Zhizhi pointed out that expanding production capacity – exports – encountering frictions – turning to the market – again encountering frictions, has become a vicious circle that is inevitable for many industries in China including chemical industry. With the continuous expansion of production capacity, just like snowballs, this vicious cycle has become faster and more extensive, and more and more nations have trade frictions.
Actively cope with rationality and power In the case of growing frictions with the chemical trade in developing countries, how should China's chemical industry respond? Some experts gave suggestions.
First, we must not give up new markets because of friction. A person in charge of the Petrochemical Coalition stated that the first cause of trade friction was the worsening environment of the economic situation. If a market is not good, it is sure to open up new markets. This is right. Developing countries are a new growth point for China’s export trade. Regardless of whether the reasons for provoking frictions are appropriate, whether laws are sound, procedures are legal, or whether anti-dumping rates are high or low, they are, after all, new growth points for Chinese exports. China's friction has caused it to marginalize.
Second, the government and enterprises must actively respond to trade frictions. Lu Bo, a researcher at the Ministry of Commerce's National Trade and Economic Cooperation Research Institute, said that in the past, China had made few attempts to solve trade frictions with developing countries and was unwilling to intensify contradictions. However, China’s attitude of humility and patience cannot be applied to all countries. In particular, countries such as India, Brazil, and Mexico that frequently create trade frictions should adopt more active and effective measures to respond and try to fight for a suit against the company. A fair and favorable political and legal environment.
An industry source also pointed out that at the enterprise level, at present, Chinese companies’ attitudes to anti-dumping lawsuits of developing countries are also relatively negative. In recent years, in foreign anti-dumping lawsuits against China, China’s export companies have often focused on developed countries such as Europe and the United States. The rate of responding to these countries has been very high and has basically reached 100%. However, on accusations from developing countries such as India and Brazil, the response rate is very low, only 30% to 40%. The response to anti-dumping lawsuits initiated by these countries is quite passive, and many companies give up their appeals. “The foreign courts are all in court, and Chinese companies are not in court. Foreign courts do not want to judge how they judge it.â€
"The final result of the company's failure to respond actively can only be to abandon the market. China's products do not necessarily have dumping in some developing countries, but these countries still investigate the case. For example, in India, some chemical products in China have three or four years. If it has not been exported to India, India may still initiate a case review and decide to continue levying anti-dumping duties. Enterprises must then find relevant government departments in China to coordinate, actively respond to and defend their interests, and advocate their own rights and interests.†The industry insiders stated that only Effectively deal with and deal with trade frictions with developing countries in order to protect the market that is not easy to win, and to avoid or reduce trade frictions from developing countries.
Third, seek differentiated competition. Adjusting product structure is the key to avoiding friction. China's long-term production of low-grade products neither makes money nor pollutes the environment. No country wants it. Enterprises should upgrade their product quality and do something that other countries can't do, and avoid competition.
Fourth, invest and set up factories in developing countries. Peng Feng, vice president of the School of Chemistry and Chemical Engineering at South China University of Technology, believes that part of the reason for trade friction is caused by the imbalance between China's product exports and foreign direct investment, and it is necessary to actively encourage Chinese enterprises to increase direct foreign investment to the development. The state, especially developing countries that have relatively high economic friction with China, have made strategic direct investments to strengthen economic ties with these countries and ease trade frictions. For example, it is possible to invest in Mexico. Thanks to Mexico's special geographical location, it can enjoy the benefits of free trade agreements reached between Mexico and 43 countries and regions in the world, smoothly entering the markets of these countries, and to a certain extent ease the impact of China-Mexico. Between the trade conflicts.
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