Eighty percent of China’s cigarette lighters are exported abroad. Its low price gave these manufacturers 70 percent of the world's market for lighters (with metal shells), and 80 percent of the European market.

However, European Union dumping investigations on June 27, 2002 may have endangered this European market, although the final judgment hasn’t yet been delivered.

Wenzhou’s lighter manufacturers are not the only ones losing overseas markets because of dumping charges. Statistics from the newly established Ministry of Commerce show that China received 278 dumping investigations out of a total of 1979 cases worldwide during the period from 1995 to June 2000, accounting for 14 percent of the total. These cases include dumping investigations on color TVs from the European Union (EU) and steel and textile investigations from the United States.

What’s more, only 35.5 percent of respondents to dumping charges win successful cases.

“China will be harassed by dumping charges from foreign countries in the long term. The non-market economy status of China makes some WTO members prejudiced to responses.” This was the conclusion that was drawn in a China WTO Report (2003), released by the Chinese Academy of WTO Studies on April 9.

Since China is not regarded as a market economy country by the European Court (EC), a third country “analogue” market economy had to be selected to establish normal values if companies were not to be granted market economy treatment, the report says after analyzing seven cases in the EC.

“The direct reason why many Chinese enterprises have extra taxes imposed on them is that the EC selected Mexico as a third country,” the report says, “but the core problem remains that China is still regarded as a non-market economy country.”

The report alleges that if the EU doesn’t change its anti-dumping measure against Chinese products and grant China market economy status, the European Court can’t veto the decision made by the European Union, leading to the extra taxes driving Chinese products out of the European market.

To prove China’s market economy status, the Economic and Resources Management Research Institute under Beijing Normal University, entrusted by the Ministry of Commerce, released on April 13 another report entitled China’s Market Economy Development Report 2003.

According to the report, China is about 69 percent a market economy measured by the internationally accepted standard, exceeding 60 percent as the threshold of a market economy country.

“The non-market economy status has caused lots of antidumping investigations against Chinese products,” said Li Xiaoxi, director of the institute.

As for the objectivity of the report, Li explained that his team chose five major criteria: government behavior, freedom of economic restriction, access to production, fair trade and financial parameters, having consulted related anti-dumping laws in the United States, European Union (EU) and Canada. Based on these criteria, they further designed 11 sub-parameters and 33 economic indicators, making the report more acceptable and comparative to world conditions.

Li added that the majority of their statistics were from the National Bureau of Statistics and other authoritative departments. Forty percent of the total economic indicators, about 13, were adopted from the Heritage Foundation of the United States and Fraser Institute of Canada. The research team adopted the ranking standard of the Heritage Foundation, dividing market freedom into five grades where one point stands for the highest level. The report listed the ranking of 33 segmented markets and achieved the ultimate result of 2.51 points, using weighted averages to about 69 percent.

As far as the remainder 31 percent is concerned, Ma Jiantang, vice secretary-general of the newly established State Assets Management Commission, suggested that it might mean the following: first, market intervention by government; second, market maturity in progress, such as the difficulty of raising funds; third, aspects include market monopoly and shortage of resources such as human resources and capital.

However, Lu Zhongyuan, director of the Macro-economy Research Institute under the State Council Development Research Center, said: “The surplus 31 percent means things which can’t be achieved by the market. After all, there’s no one-hundred percent market economy country.”

(China.org.cn by Tang Fuchun April 23, 2003)