Focusing on fastener industry as the main force to solve international trade frictions

During the 10 years since China’s accession to the WTO, China’s economic and social development has achieved tremendous successes, and trade frictions and industrial conflicts have also increased. In the past 10 years, China has been the country with the highest number of global trade friction cases, and Zhejiang Province is the hardest-hit area. In 2012, it is very likely that China will face the "year of the exam" of international trade friction. In 2012, many export-oriented companies are fretting about the possible arrival of international trade.

The long-running battle in Zhejiang Jiaxing, Mr. Chen, who is engaged in steel screw production, has been anxious in recent years. "In March 2008, the US Department of Commerce issued a formal investigation and said that China's steel screw dumped US exports and caused damage to the US domestic industry. A year later, the United States began to impose anti-dumping final rulings on Chinese companies. After making the final ruling and starting to impose taxation, our products have sharply reduced their exports to the United States. Most of our counterparts are the same as we are. China has basically lost the US steel screw market,” Mr. Chen introduced.

“At that time, after the case was filed, the government and relevant departments immediately responded to us. At that time, there were 60 companies involved in Jiaxing, and finally 5 companies responded. I consider that my own company is small, and hesitates about the cost and the probability of success. Finally, he did not choose to respond. "However, he has been in contact with the responding counterpart. "As a representative of a small business, the outcome of their response is very important."

To this day, the response to the lawsuit has still not resulted. “After a long period of research, Jiaxing Brother Standards Co., Ltd. filed an appeal with the United States Court of International Trade to apply for a non-conformity of the financial substitution ratio used by the US Department of Commerce in the case ruling. The judicial process is now ongoing.”

Corresponding to the long-lasting response, the export market of enterprises has shrunk. “We have lost a market that is difficult to expand, and we are just experiencing the impact of the economic crisis. The days are really sad.” Chen sighed.

Mr. Chen is not alone. Take Jiaxing as an example. Since 2007, the Jiaxing fastener industry has faced anti-dumping investigations by the European Union, the United States, and Mexico.

Trade friction "hard-hit area"

In 2000, private enterprises in Zhejiang exported 1.58 billion U.S. dollars, accounting for only 8.7% of the current year; by 2010, this figure had reached 103.68 billion U.S. dollars, and the export volume had increased 64.6 times, accounting for 48.7 percentage points. At the same time, these 10 years are also 10 years of frequent trade frictions and industrial conflicts.

Chen Ruxuan, deputy director and press spokesman of the Zhejiang Provincial Department of Commerce, told reporters of Zhejiang Merchants that since China's accession to the WTO, Zhejiang Province has encountered anti-dumping and anti-dumping laws from 27 countries and regions including the United States, the European Union, Turkey, India and Brazil. There were 492 trade friction cases such as subsidies, safeguard measures, special safeguard measures, and 337 investigations, and the amount involved exceeded US$11.5 billion. About 70% of the country's trade friction cases involve Zhejiang, and the amount involved in Zhejiang accounts for about 25% of the amount involved in the country. To this end, Zhejiang Province established the Import and Export Fair Trade Bureau and the Industrial Damage Investigation Bureau to strengthen the guidance and coordination of anti-dumping responding and prosecution work.

“As a big foreign trade province, Zhejiang's export manufacturing industry will face an increasingly harsh domestic and international development environment, and transformation and upgrading are extremely urgent.” Zhang Handong, director of the Zhejiang International Economic and Trade Research Center, analyzed that, on the one hand, the world economic and trade friction situation in 2012 On the other hand, from the perspective of the international division of labor, most of China's export manufacturing industry is still at the low end of the global industrial chain, and many unfavorable factors form a “forced mechanism” for the export industry. The transformation and upgrading of the export industry has made the industry in China's industries and developed countries increasingly converge. The industrial competition has become fiercer, the friction is wider, and the front is longer. The degree will be fiercer and the response will be more difficult.

“When our products are on an equal footing with multinational products and have the ability to replace their products, friction must be unavoidable, and this friction can occur in any market in our country, forming a roundabout trend for our industry. This is the reason why provincial glyphosate, glass fiber and other products are frequently encountered by international multinational giants in trade remediation surveys in major markets around the world."

"In addition, from the point of view of the transformation and upgrading of the export industry, intellectual property rights must not be bypassed." Zhang Handong said, "The core technology can be purchased without spending money. To achieve the advantage of late-generation, we must go through the introduction, digestion and absorption." The road to innovation will not be ignored by developed countries in Europe and America."

In the process of introducing and nurturing and developing strategic emerging industries, the government is vulnerable to investigations such as anti-subsidy when it moves to international markets and impacts similar industries in related countries. "This is what our solar photovoltaic products are." Zhang Handong cited for example.

The signs of the college entrance examination year indicate that the international trade frictions China is facing in 2012 will be more complicated, and the trend of rising trade frictions along the value chain will become more apparent.

As the world competes for increasingly fierce competition in strategic emerging industries, China’s emerging industries may become a “stricken area” for trade friction in 2012. On November 8, 2011, the U.S. Department of Commerce decided to launch a “double counter” investigation on China’s solar battery (board) exports to the United States and launched the first “double counter” survey on clean energy in China. Some analysts pointed out that this means that the beginning of a new round of trade protectionism in the United States, China's entire new energy field and even the seven strategic emerging industries may become its goal.

At the same time, developing countries have started to noticeably increase their trade restrictions. From January to September 2011, Brazil, Turkey, Indonesia, Argentina, and India jointly launched 18 trade remedy investigations against China, accounting for 36% of the total number of surveys in China.

"For the future of trade friction, we must first be psychologically prepared. Second, we have also started to "move forward and take the initiative."" Zhang Handong said that perfecting the trade friction response mechanism can be divided into several steps.

“First, we must strengthen the establishment of an early warning system for foreign trade, and we must incorporate new industries into the key areas for the construction of early-warning demonstration sites for foreign trade.” Today, Zhejiang has established 65 provincial-level foreign trade warning demonstration points in cities and counties with developed block economies.

"Second, we must start from the industrial policy and trade policy to start counter-measures and improve the response mechanism. The national industry and trade policies should ensure the transformation and upgrading of the export industry."