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China Dumping Review Still Relevant?

Sales & Trends

The bike sector is always responding swiftly to new developments. For instance how the reactions were on the new Generalized System of Preferences (GSP) which came into effect on January 1, 2011.

China Dumping Review Still Relevant?

The bike sector is always responding swiftly to new developments. For instance how the reactions were on the new Generalized System of Preferences (GSP) which came into effect on January 1, 2011.

The relaxation of the GSP rules by the European Union, in combination with rising wages, higher material prices, as well as increased inflation in China, spurred and is spurring bike makers to relocate or open new factories in the GSP countries that now have duty free export status to Europe. Within two months after the new GSP came into force, news of the first bike maker to set up shop in Cambodia came in. This will not be the only one. More will follow; just like that which happened with manufacturers of shoes and textiles. And not only to Cambodia, but also to Bangladesh, Vietnam, Indonesia and other GSP countries.

All this made me think of the anti-dumping actions against China. As we all know, currently the anti-dumping measures on bikes and parts made in China and exported into the 27 European Union member states are AGAIN under review. The by the Europen Commission initiated and on March 9, 2012 announced interim review will take 15 months before it is concluded. So, it will take the whole year of 2012 and a big part of 2013 for the European Commission to decide for a withdrawal or continuation of the anti-dumping measures and whether the dumping duties of 48.5% on bikes imported from China will remain in force or not.

I wonder if this review is still relevant? I wonder if the whole dumping issue, which over the years caused such contradiction within the sector, is still worthwhile discussing? In particular, since the trend for the coming years is now clear. More and more production of complete bicycles as well as parts will take place in so-called Least Developed Countries, which are given trade benefits for its export to Europe under the GSP schemes.

By the way, the previous, much more stringent GSP rules already spurred a huge growth in bike and parts production targeted to export to Europe and taking place outside China. That production stands now at about 5 million bikes (excluding Taiwan of course, which is not a GSP country). Five million is double the number China exported to Europe in its heydays of bike exports. I cannot imagine that those days will return, as the end of China as production base for low-tech products like bikes and bike parts is quickly approaching.

 

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