Chinese Bicycle Export Might be Taxed Again

The European Union has threatened to renew a tariff on bicycles from China for another five years while scrapping similar levies against Vietnam. China's bicycle industry calls it an unfair treatment as the renewal gears up for legal review.

Our reporter Zhang Ru has more.

The EU has began procedure to review the current anti-dumping measures against bicycles imported from China.

The import tax that was imposed in July, 2005 is to expire this Thursday.

The EU earlier announced it will stop taxing Vietamese bikes after imposing the tariff for five years, but it seems the bloc will not do the same to China. Reports say the EU is considering to renew the 48.5 percent duty on Chinese bicycles until 2016.

An investigation at the request by the European Bicycle Manufacturers Association claims that without the tariff, Chinese bike exporters will continue dumping and will prove harmful to EU producers.

Yan Beizhan from a major Chinese bicycle producer Zhejiang Libahuang Corp. says the anti-dumping tax is a major disadvantage for Chinese produced bicycles.

"A bicycle that is 100 US dollars becomes 150 dollars in Europe so our price advantage is gone, meaning consumers will not choose our products. It means that Chinese companies can not access into the European market. Markets like the US and Japan are all open to Chinese products, but only the EU has been an exception all along."

European trade protection against Chinese bicycles dates back to 1993, when the EU introduced a 30.6 percent anti-dumping duty on imports from China.

Zhang Peisheng from China Chamber of Commerce for Imports and Exports of Machinery and Electronic Products, says Chinese bicycle exports to Europe has slipped for 17 years.

"Before the anti-dumping measures, in 1992, the export to EU countries was about two to three million, now it is only one quarter of the amount. We are being edged out."

Zhang also says Chinese bicycles are up to the EU standard of both quality and style and are received well among customers. He attributes the unfair treatment to trade protectionism.

Liu Huijuan, an legal expert in China's machinery expert, believes for an industry that has been protected for 17 years, bike manufactures in the EU should be strong enough to meet competition from others.

She says bicycle sales in EU have maintained a growth rate of 11.5% every year from 2003. Retail prices are 30 percent higher than that in the US.

"If the protection continues, that's unfair competition! And we think this is trade protectionism."

Liu says the bicycle industry is actively preparing for the legal review, but admits it will be quite difficult.
Liu points out that taxing Chinese bicycles does not fit EU's high-profiled declaration to develop in an environmentally friendly way.

For CRI, I'm Zhang Ru.