The US Trade Representative's office has just released a new report documenting the legal obstacles foreign firms face in their business dealings with China. As might be expected, there were many grievances, although the agency did concede that China has been far more welcoming to internationals than in previous years. Besides its focus on the topics of contemporary spats between China and the US – items such as steel, export subsidies and intellectual property rights (strangely, valuation of the RMB was omitted) – the American agency notably brought forth an issue in which the Chinese government has been particularly rigid: control of the media and telecommunications.

Under the terms of the Protocol of Accession to the WTO, China was obliged to allow non-state owned enterprises, including foreign owned enterprises, to import movies, DVDs, music, books, newspapers and journals. A WTO ruling against China called for a disbandment of this government-enforced monopoly, yet the Chinese government has remained very reluctant to release its control over these forms of media.

According to the report, once within China’s borders there are more hurdles. Movie imports destined for theatrical release are limited to 20 revenue-sharing films per year. The government then closely regulates the foreign film showings to ensure that their viewing time in the theatres does not exceed one-third that of Chinese movies. Then there is the provision that blockbuster films originating from abroad should not compete with those made domestically (think Avatar when Confucius was released). Prefer television? Foreign programmes are not allowed more than 25% of airtime, and are outright banned between seven and ten pm on the basic channels. Even on cable, the percentage is only increased to 30%. And of course, everything is subject to censorship.

Those in the telecommunications industry are equally obstructed. Foreign firms are limited to no more than 49% stakes in joint ventures, although none have been intrepid enough to enter the Chinese market within the last decade, nor have any local companies for that matter. There are only four nation-wide players – China Mobile, China Telecom, China Unicom and DBSat – and it seems that, based on the amount of restrictions on the industry, the Chinese government is content to leave its communication capabilities within the hands of these few domestic firms. Then there is the internet. Google completely evades mention by the US Trade Representative office.

Naturally, the report is not without its quirks. The first page mentions that the import of petroleum and sugar into China is reserved for state-owned enterprises, but that this is indeed consistent with its agreement with the WTO. One is left to ask, why sugar? Then in a later paragraph: “China still maintains high duties on some products that compete with sensitive domestic industries…Raisins face duties of 35%”. (May China anticipate Hillary Clinton’s next condemnation in a speech titled “Steel, Tyres and Raisins?”)

Humor aside, the US Trade Representative report says that despite the countless ways in which China has opened itself to international trade, if anything it has become more restrictive in its control of the media and its telecommunications systems.This may be an issue beyond the influence of trade representatives, American or otherwise.

A few months ago, as part of a long string of protectionist-oriented disputes involving China, the heads of 30 industry groups from North America, Asia and Europe wrote a letter to Chinese ministers in protest of a recent law involving the procurement policies of the Chinese government. From October 2009 onwards, China’s public purchases were to start favoring domestic technologies. The legislation was deemed a significant blow to trade for international high-tech firms, as China’s government procured USD 88 billion worth of goods and services in 2008, including 14% of the nation’s 40 million PC purchases.

The favoring of domestic enterprises is not an issue exclusive to China, however. Although over 20 countries have signed on to the World Trade Organization’s (WTO) Agreement on General Procurement (China has not), it is scarcely followed at all.

In the WTO’s own words, the agreement, “[has] not worked well”. It requires “non-discriminatory practices and open procedures in government procurement among member states, and covers not only central government purchasing of goods… but also procurement of services, including public works, and procurement at the sub-central levels of government. Procurement in public utilities is also included.” This applies only to contracts valued above a certain threshold, as set by the WTO for various procurement categories; below the threshold, countries can be as discriminatory as they please.

Participants are supposed submit statistics of their procurement activities on an annual basis, to include countries of origin and totals. Only eight countries have bothered to present anything at all. Their submissions suggest anything but engagement in “non-discriminatory practices”.

• Norway: The most recent statistics are from 2005. Of the USD 1,215 million procured, only 1.3% of supply, 6.9% of service and 1.3% of works contracts went to foreign companies  
  

• South Korea: In 2004, the most recent data from South Korea, procurement contracts were valued at over USD 25 billion. Less than 1% went to foreign-based firms, these almost exclusively entered into by the Ministry of National Defense with firms based in the United States, Germany and the Netherlands

• Japan: 98% was procured domestically in 2008. Ironically, its Foreign Trade Commission did not contract at all with foreign-based companies

• US: The US submissions to the WTO are not broken down by country of origin. However, the website of the US Federal Procurement Data System does give this data, although buried within around 100 xls files – one for each federal agency. Sampling these files reveals that beneath the column heading “Country of Origin”, if there is anything at all, there is only 'US.' The USD 417 billion procured by the US in 2007 most likely came from its own 50 states

• Switzerland: Switzerland reports the highest proportion of overseas procurement. In its most recent submission of 2003 data (in French), it lists 60% of its above-threshold contracts going to domestic bidders, 29% to US firms and 9% to the EU, with 2% categorized as “other”

• Canada: does not list country of origin. The country reports 1,759 contracts made in 2007 valued at USD 1.9 billion

• Hong Kong: consistently submits a two-page document with their name, the date, and nothing else of informational value.

• Liechtenstein (yes, Liechtenstein): This constitutional monarchy of 35,000 people is a model of transparency. It lists all 109 of its 2008 government contracts, and even goes so far as to give the name of the company it has procured from. Somehow even tiny, landlocked, mountainous Liechtenstein manages to largely avoid procurement from abroad. Besides domestic contracts, there were only a handful from Switzerland, two from Iceland, one from Germany and one from Austria.

It seems discrimination in government procurement is a worldwide phenomenon. If the heads of these international industry groups want the Chinese government to partake in fairer procurement practices, the first step may be to convince their own governments to do the same.

Trade sanctions have clearly strained China’s steel industry. Seamless steel tubes, Oil Country Tubular Goods (OCTG), drill pipes, steel mesh panels, wire shelves... the list of newly sanctioned Chinese steel products goes on. Among the numerous made-in-China products impacted by international trade frictions, China’s steel industry has been hit the hardest, and given the severity of these trade disputes, the consequences for China’s steel enterprises are substantial.

Price and quantity decreases

Proposed last April, the oil well pipe anti-dumping and anti-subsidies action undertaken by the US International Trade Commission will adversely affect Chinese exports of as much as USD 2.8 billion. These exports are supplied by around 200 steel mills, and these provided oil well pipes to the US during early 2008 and Q1 2009. The monetary value at stake makes this the largest steel trade dispute in US history.

The oil well pipe anti-dumping and anti-subsidies case is only a sample of the international trade sanctions that have targeted Chinese steel makers in recent years. Since 2008, the EU, the US, Russia, India and other countries have successively launched anti-dumping and anti-subsidy surveys on China’s seamless steel pipes, oil pipes, drill pipes, steel mesh panels and other steel products. As a result of the financial crisis, global market demand has rapidly declined, exacerbating ongoing trade frictions – particularly within the steel industry. According to China Customs, in December 2009 China exported 3.34 million tons of steel, which contributed to a total of 24.6 million tons for the whole year 2009. This annual figure represented a 58.5% y-o-y decline.

Of all steel goods, pipe products were the most severely affected. In 2009, China's seamless pipe exports dropped by almost 50% compared to 2008. In 2009, China's export price for oil well pipes to the US was only USD 1,600/MT, well below highs of USD 3,600/MT in 2008.

Entering new markets

Some Chinese producers have adjusted their strategies in response to the sanctions. As an example, take one of China’s major seamless steel manufacturers, whose exports accounted for 48% of total sales volume before the financial crisis. In 2009 its shipments to major regions such as North America and Europe fell by more than 70% compared to the previous year, yet its total 2009 export volume dropped by only 10%. Its secret weapon: new markets – the company’s sales in Asia increased by 30% and African sales by 100%.

Other steel mills have followed suit, successfully exploring new markets such as Southeast Asia, the Middle East and Africa, thereby weathering the decline in demand from mature markets.

Along with the shift from mature to developing markets, export product structures are also changing. Many manufacturers are shifting their focus from high value-added products such as oil well pipes to a number of oil and gas transmission pipeline products, primarily in demand in countries in Southeast Asia and Africa. These regions are without well-established steel industries, ensuring less risk of new trade frictions arising from local competition.

Expanding domestic demand

Many Chinese steel mills capitalised on the national stimulus package which enlarged the domestic market in 2009. One of China’s largest stainless steel mills stated that although their exports declined by more than 50%, domestic sales increased by 58%, causing profits to remain consistent with those of 2008.

As of November 2009, China's net exports of steel have been largely restored to earlier levels. Nevertheless, China’s steel exports are facing more difficulties as overcapacity problems mount and international protectionism becomes more severe. As a consequence, China’s steel industry may yet have to adjust again in the near future.

In the post financial crisis era, many countries are seeking new paths for economic growth and are implementing defensive measures to preserve their own domestic industries. Given these circumstances, along with the recent anti-dumping cases raised by the US Department of Commerce in regards to China's steel plate and pipe products, maybe it is time for China to rethink its business development methods and to shift its focus to value added products.

美国当地时间29日，美国商务部初步裁定，对从中国进口的钢格栅板征收反倾销税。部分企业涉及的关税高达145%。

钢格栅板是用钢材作为原材料的深加工产品，被主要用于工业类建材。根据美国商务部的统计数据显示近年中国出口到美国的钢格栅板增长极为迅速。据悉，美国商务部计划于2010年4月做出最终决定， 当前多家被卷入的中国厂家正在积极应诉。

除此外美国国际贸易委员与30日的表决也使得美国对中国产用于油井钢管征收反补贴税的裁决获通过，该裁决随即将正式生效。

据媒体统计，自一月奥巴马就职以来，已经对中国产品开展了至少十余次“反倾销、反补贴”调查。中方已多次就美国对中国出口产品征收关税表示不满，称这种贸易保护措施阻碍自由贸易。

后危机时代各国都在寻求新的经济增长方式。在这个大背景之下，中国经济增长方式的转变就显得更为迫切。正如商务部发言人所说：“转变外贸发展方式是我国从外贸大国成长为外贸强国的必然选择。”

Building on the last post on this blog regarding protectionism, trade protectionism is now a big concern in China. Chinese GDP relied heavily on foreign trade before the financial crisis. As one of the three engines of China's GDP growth, the exporting sector has just started to recover in 2009, but it now faces the threat of protectionism. The ‘anti-dumping’ cases that some Chinese suppliers are confronting will probably not effect China’s economy and exporting sector too heavily in the big picture, but the protectionism message sent by US government from these cases is a serious concern that China needs to consider and be prepared for.

自9月初美国通过了轮胎特保案的最终裁定，对从中国进口的所有小轿车和轻型卡车轮胎征收为期三年的惩罚性关税开始，贸易保护主义的抬头开始成为国内进出口行业愈加热议的问题。事实上，轮胎特保案只是中国目前遇到的众多贸易争端之一。09年以来，中国很多行业的产品出口遭遇到了类似的问题。（如下表）.

国家 美国
行业 无缝钢管
事件 继欧盟之后，美国商务部10月7日宣布对从中国进口的无缝钢管发起反倾销和反补贴税调查。此举可能导致美国对此类产品加征接近100%的新关税。
时间 2009年10月7日
影响 无缝钢管可能失去全球最大出口市场

国家 欧盟
行业 无缝钢管
事件 10月6日，欧盟部长理事会发布公告称，裁定中国输欧无缝钢管对欧盟产业构成损害威胁，决定征收17．7％～39．2％的最终反倾销税。
时间 2009年10月6日
影响

国家 美国
行业 轮胎
事件 美国对中国轮胎发起的特保措施，决定对从中国进口的所有小轿车和轻型卡车轮胎实施为期三年的惩罚性关税，意味我国会损失10亿美元出口额，影响10万左右工人的就业。
时间 2009年9月11日
影响 涉案金额高达22亿美元

国家 美国
行业 油井管产品
事件 美国对中国油井管产品进行反倾销、反补贴合并调查，这是中国迄今为止遭遇最大涉案金额的贸易摩擦官司。
时间 2009年4月
影响 涉案金额高达32亿美元

国家 美国
行业 铜版纸产品
事件 美国宣布对中国出口美国的铜版纸产品征收临时反补贴税，改变了美国坚持了23年的不对非市场经济国家实施反补贴法的贸易政策。
时间 2009年3月30日
影响 涉案金额高达22亿美元

国家 印度
行业 高新技术产品
事件 印度对我国同步数据传输器发起贸易救济调查。
时间 2009年2月
影响 涉案金额为8.8亿美元

国家 印度
行业 玩具
事件 印度宣布今后6个月内将禁止进口中国玩具，浙江、广东地区的一部分玩具企业受到不少影响。
时间 2009年2月
影响 浙江、广东地区的玩具企业受到影响。

注：表中数据引自新浪财经

以上数据看起来非常惊人，但整体来说，中国进出口的走势还是在恢复中的，这些单个的反倾销案件对中国某个特定公司或行业造成的损失并不是特别影响大局。比如，根据近期中国海关公布的数据，9月PMI新出口订单指数53.3%，连续5个月超过50%并保持上升。9月季调后的新出口订单趋势53.8%，自09年1月以来持续上升。

但是受金融危机影响，国外市场的消费能力萎缩使得我国这种出口恢复还是非常缓慢。在这种背景下，以美国为代表的国家或地区实施的贸易保护主义所造成的数个反倾销案件对中国造成的心理影响恐怕远远大于经济损失。奥巴马曾在G20峰会上提出针对对美贸易顺差大国(主要是中国)的“可持续及均衡增长框架”协议。美国政府认为，全球经济的不平衡(特别是美中贸易的不平衡)与危机的发生有一定的因果关系。当然，将源自美国而祸及世界的此次危机，归于这种不平衡尤其是中美贸易的不平衡，显然是嫁祸于人的不公平做法。根据克鲁格曼的说法，金融危机的根本原因是因为“美国人花费的比他们挣的多，通过国家借债的方式把借来的钱用于修建房屋和购买消费品以及为联邦预算赤字融资”。

但无论如何，当前美国政府对于贸易逆差的态度从而有可能引发的贸易战或贸易保护主义全球化蔓延才是我们真正值得担忧的。比如近期中国商务部对美汽车产品发起的“双反”调查，也对美国的贸易保护主义明确表明了态度。

毫无疑问，此次奥巴马的访华之行会成为中美双方国内的各相关行业热切关注的事件，甚至在更大的范围内吸引全球各国的眼球。美中双方对于贸易问题的相关谈判结果会成为以后在相当长一段时期内中国的进出口景气风向标。当然早在今年年初的时候中美双方就有过类似的对话，并且没有对以后的贸易环境形成很大的冲击和影响。而这次我们也同样只能拭目以待，希望双方能够在克制的基础上达成一定共识，以更开放的态度鼓励双边甚至多边贸易的运行。而同时对于某些已经或可能受到影响的厂家和行业来说，加速技术升级换代和积极开拓多区域的国外市场无疑也是必需要准备的应对手段。

The European Union's trade commissioner, Catherine Ashton, claimed in a document released last week that despite 223 restrictive trade measures since October 2008, a protectionist worst-case scenario has been avoided, especially as the Group of 20 leaders made commitments to protect free trade. Yet a spokesman from China's Ministry of Commerce over the weekend proclaimed that China has suffered heavily from trade protectionism, which has been rising since the start of the financial crisis. And he gave some stats to back it up. In the first 9 months of the year, the spokesman said, 19 economies launched 88 probes into Chinese products, involving USD10.2 billion worth of export goods. The number of probes is up 29% compared to the same period last year, while the monetary value is up a full 125%. The 88 probes against Chinese products included 57 anti-dumping cases, nine of anti-subsidy and 15 safeguard actions and 7 cases of special protection. The spokesman particularly singled out the United States - responsible for 14 of the 88 probes with a value of USD5.84 billion, an increase of 639% y-o-y.

According to data from the WTO's Global Antidumping Database, in Q3 2009 WTO member governments initiated 44 new product level investigations in response to domestic industry requests for the imposition of import restrictions, most of these (37) occurred under a national antidumping law. The cumulative number of new requests for protection during the first three quarters of 2009 was 30.3% higher than for the same period in 2008, and China continued to be the exporting country most targeted by new investigations in Q3, facing 23 (or 62.1%) of 37 new product-level investigations. For the whole of 2008, industry demands for new import restrictions against China under these policies were up 22.7%, while a 7.8% increase is expected in 2009. Interestingly, however, in the report accompanying the data, author Chad Bown concludes that

WTO member use of trade remedies to target China's exports is not a new, crisis-related phenomenon, as it continues a trend dating back to China's WTO accession in 2001 and even earlier.

So protectionism may have been on the increase since the financial crisis - yet the targeting of Chinese exporters in this regard is nothing new. The series of anti-dumping duties recently levied in the US on imported Chinese products (notably on tires and steel pipe) have, however, caused the contentious shadow of protectionism to fall squarely over US President Obama's impending visit to China. The Chinese have countered with tariffs and investigations of their own, notably on whether cars imported from the US are being sold below market prices in China, yet surely these matters can all be talked out in a civilised manner when the two finally sit down for what is now a well overdue chat.