The Ministry of Foreign Trade and Economic Co-operation (MOFTEC) made the announcement yesterday, bringing the investigation into effect, according to MOFTEC sources.

The investigation relates to imported art paper listed under "48101100" and "48101200" in the tariff of the General Administration of Customs.

MOFTEC will decide whether dumping took place, and if so, whether it infringed upon China's regulations on anti-dumping.

The State Economic and Trade Commission will also investigate any damage done to China's industries from the alleged dumping.

The dumping case was reported by Goldeast Paper Co Ltd in Jiangsu Province, Shandong Wanhao Paper Group Co Ltd, Shandong Quanlin Paper Co Ltd and Jiangnan Paper Company in Shanghai.

The combined production of the four enterprises makes up over 60 per cent of the total art paper output in China.

Goldeast Paper Co Ltd is one of the 13 enterprises run by Asia Pulp & Paper (APP) in China. APP, headquartered in Singapore, is the largest paper enterprise in Asia. As the largest among the four art paper producers in China, Goldeast is capable of turning out one-half of the country's total domestically produced art paper annually.

Art paper is the highest grade paper used in the printing industry. China started manufacturing art paper two years ago. Before, the country relied on imports to ease the art paper shortage, Deng Deyong, vice-managing director of APP China, said in an exclusive interview with China Daily.

The Republic of Korea is the largest art paper exporter to China. Art paper imported from the country makes up about 40 per cent of China's total imports. Imports from Japan, the United States and Finland each account for about 10 per cent of the total imports, Deng said.

Due to the increasingly improved quality of home-made paper, Chinese customers have started to switch from using imported art paper to paper made at home.

To regain market share, producers of the imported art paper began to cut their prices on the Chinese market last year, triggering a price war .

According to statistics, China's annual demand for art paper is about 1.7 million tons. The country is now capable of producing 1.4 million tons of such paper. However, China's annual imports of art paper have exceeded 1 million tons for the last three successive years. About 1.03 million tons were imported last year.

"Foreign art paper pouring into China at low prices has seriously damaged the country's art paper industry," Deng said.

Art paper makers have been forced to cut employment and reduce production. Economic losses have brought enterprises into great difficulties.

To protect their own interests, the four domestic enterprises put forward an application for an investigation into anti-dumping.

The case, the first anti-dumping one put forward by Chinese enterprises since China entered the World Trade Organization (WTO) last December, has aroused great attention from related Chinese governmental departments.

Deng said that the art paper tariff will be cut from 15 per cent to 9 per cent this year, and it will be further reduced to 5 per cent in two years.

Apart from stopping anti dumping, Chinese enterprises should make greater efforts to improve the quality of their products, update management methods and increase efficiency to thrive in the heated competition.

(China Daily February 7, 2002)