Chinese silk firms to fight India

Chinese silk exporters have joined forces to jointly fight an Indian anti-dumping case worth $180 million, though their chances of winning the case was "slim," the state media reported on Thursday.

At least 20 leading silk exporters, accounting for 80 per cent of China's silk fabric exports to India, are going to fight an Indian anti-dumping case, China Daily quoted an industrial official as saying in Hangzhou, capital of Zhejiang province in east China.

Representatives of the Chinese companies along with lawyers from three legal firms attended a national meeting in Hangzhou on Wednesday to chalk out ways to counter the anti-dumping case against Chinese silk in India, Wang Yu, secretary-general of the China Chamber of Commerce for the Import and Export of Textiles, a major association for Chinese textile exporters, said.

The meeting was a platform for the companies to communicate with the law firms. More than 30 attended and about 20 have shown their willingness to fight, Wang said.

The case involves 100 Chinese exporters and products worth $180 million. Chinese companies still have about one month to complete their response, Wang said.

The Chamber of Commerce will lead the challenge on whether the Chinese exports damaged Indian industry, Wang said.

Selling under the normal value and damage of the industry are two elements in deciding an anti-dumping case, the official newspaper noted.

As India refuses to grant China a 'full market economy' status, a factor used in judging anti-dumping cases, the production costs offered by Chinese companies are not accepted when calculating a normal value, which means Chinese hopes of proving their products were not sold under the normal value are "slim," the report noted.

Wang said the Chamber of Commerce will collect more information and may even send a delegation to India. The co-operation with Indian importers will be "useful" as they oppose the manufacturers' move to rake up the anti-dumping provision, Wang added.

Most Chinese exports of silk into India are for re-export. Exporters have to import silk yarn and fabric from China as these are more competitively priced and are of much better quality than what is available locally, the report said

It also quoted the Indian Silk Export Promotion Council chairman Bimal Mawandia as saying that there is no justification for imposing an anti-dumping duty on silk imports, as this has only made the raw material for exporters more costly.

The commerce ministry set a base price of $27.98 per kilogram for Chinese imports of mulberry raw silk of 2A grade and below which took effect from July 2003.

Earlier this year, 28 major silk exporters formed a group to watch and co-ordinate exports, appealing to companies to stop what it considered "bad practices" such as under-invoicing.

The major task of the group was to try to persuade India not to file the anti-dumping case, deputy general manager of Cathaya International Holding Co., Lu Xing said.

The alliance effectively stopped the issuing of lower-valued invoices to Indian importers, which enables them to avoid paying tax, Lu said.