Why Downstream Enterprises Are "Irritated" Anti-dumping Measures Result in a Significant Increase in Production Costs

June 19 01:02:23, 2018

'Anti-dumping is very annoying. 'Most people listen to these words, certainly understand this: because in recent years China has become the hardest hit by anti-dumping abroad. However, here I heard that the CEO of a company is talking about another kind of meaning: After the country adopts anti-dumping measures against certain imported products, the price of raw materials controlled by the monopoly of a few domestic large enterprises soars, and the production cost of downstream enterprises is large. As the rate of increase rises and production is unsustainable, it is 'very annoying'. A company manager told the author that as one of the company's main raw materials, the price of styrene-butadiene rubber has a great influence on the company's profits. After the preliminary dumping of styrene-butadiene rubber, its price increased by approximately 4,000 yuan per ton, which brought great impact on downstream companies.
As we all know, anti-dumping is an effective means that the World Trade Organization allows to maintain fair trade and protect the security of domestic industries. In the first half of last year alone, China initiated 11 anti-dumping investigations. Undoubtedly, the role of anti-dumping investigations and rulings in maintaining fair trade, protecting national economic interests, and industrial interests has been recognized by more and more people. So why do upstream companies anti-dumping and downstream companies 'very annoyed'? To put it bluntly, anti-dumping is also a double-edged sword. While safeguarding the interests of some domestic enterprises, it will hurt the interests of some other domestic enterprises. It will even double the burden on the upstream enterprises to the downstream companies. . This is particularly evident in the chemical industry that is closely associated with the upstream and downstream industry chains.
The same example also appears in the anti-dumping reaction of acrylates. In June 2001 and April 2003, the country announced the final anti-dumping decisions on imported acrylates originating in Japan, the United States, Germany, South Korea, Indonesia, Malaysia, and Singapore. After the implementation of anti-dumping measures, the domestic supply of acrylic acid from the original oversupply, it becomes an odd commodity can live, the price has risen alarmingly, so that downstream acrylic acid companies are difficult to sustain.
However, if you go deeper, you will find that the 'irritated' of the downstream companies is not entirely due to the rise in the price of raw materials brought about, but rather the inequality of the right to speak of the upstream and downstream companies.
As far as China's petroleum and chemical industries are concerned, the upstream raw material industry is mostly concentrated in state-owned key enterprise groups. The downstream industries are mostly competitive industries and are scattered and brave. In terms of anti-dumping, the government has been particularly eager to help upstream companies anti-dumping, and even listened to complaints from upstream companies that foreign companies have been dumped. As a result, downstream companies not only have to withstand the surge in raw material prices brought about by external anti-dumping, they have even complained about it. It's no wonder that downstream companies are 'very angry'.
Anti-dumping is a double-edged sword that will harm the interests of some companies while safeguarding the interests of some companies. The fundamental solution to the problem is to truly establish a fair opportunity for competition. The market must be fair and in, and the government must be fair to the enterprise. In other words, when anti-dumping is to be conducted on the international market, anti-dumping actions must be carried out in China.