China: A Sleeping Giant of Temporary Trade Barriers?

While tariff rates around the world have decreased during the last five decades, there has been an increase in other instruments of protectionism – in particular, antidumping (AD), countervailing duties (CVD) and global safeguards (SG) - collectively, temporary trade barriers (TTBs). In this paper, we examine China’s use of these TTBs both before and during the 2008-9 crisis in order to identify underlying historical trends and explore potential changes in their use over time. While the flow of new AD investigations increased during the crisis, China’s total stock of imports subject to AD measures decreased in terms of both count and value. Despite this decrease in the stock of imports subject to AD, we find a number of worrying trends. An increase in the flow of AD investigations during the crisis was a reversal of the trend from last five years. Second, prior to the crisis, almost all of China’s AD use was confined to only five Harmonized System (HS) sectors, however, during the crisis, some new AD investigations were in sectors that had never participated in AD earlier. In addition, a large number of China’s AD measures have lasted for longer than five years. At the end of 2009, only 40% of the AD cases imposed five or more years ago have been removed. However, not all news is bad. The size of the ad valorem AD duty has decreased in recent years. Also, through 2009, very few Chinese firms have participated as petitioners with most of them participating only once. We also find several differences in China’s AD use across developed and developing trading partners both before and during the crisis. For instance, not only all of China’s AD measures through 2009 disproportionately targeted developed countries but also the entire increase in AD investigations by new sectors during the crisis years was directed against developed countries.