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issue: October 2003 APPLIANCE Magazine

China Report
Trade Commission Says Chinese TVs Hurt U.S. Makers

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The U.S. International Trade Commission has issued a preliminary ruling stating that imports of Chinese televisions are hurting American television manufacturers.

This ruling will lead to further investigations that may lead to imposing import tariffs on Chinese-made televisions.

A television manufacturer in the U.S. - Five Rivers Electronic Innovations - who produces televisions for Samsung Electronics and Royal Philips Electronics NV, brought the unfair trade practices complaint before the U.S. International Trade Commission last May. Joining Five Rivers in the complaint was labor unions representing workers from Toshiba, Sanyo, and Sharp U.S. manufacturing facilities. All are requesting antidumping duties of 84 percent on Chinese TVs and 46 percent on Malaysian TVs. The complaint claims that Chinese and Malaysian television imports have increased from 210,000 units in 2000 to 2.7 million units last year, forcing line shutdowns and layoffs at U.S. manufacturing facilities.

China is the largest producer of televisions in the world, with an output of 39.67 million sets last year, which is equal to about 24.6 percent of the world's total production. Of that figure, China exported almost 20 million units.

China's television makers deny selling below production costs and claim that a protracted domestic price war has forced them to continuously cut costs and greatly improve cost competitiveness. Since the late 1990s, Chinese television producers have raged a domestic price war that has decimated profit margins. The profit margin on low- and mid-level sets is less than 2 percent, but the margin is still more than 10 percent for high-end models, such as projection and plasma display TVs, according to an official with Shanghai Yongle Household Electrical Appliances Co. An official from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), which represents major Chinese TV exporters, said it is preparing its defense in the next stage of investigation. The U.S. investigation comes just months after Chinese manufacturers successfully settled a similar anti-dumping dispute with the European Union that eliminates the 44-percent import duties in those markets.

Sichuan Changhong is the largest manufacturer of televisions in the world. After an aggressive expansion, production capacity is now more than 15 million units annually. Almost 80 percent of China's TV exports to the U.S. comes from Changhong. But there are other large Chinese manufacturers: Konka, Haier, HiSense, TCL, and Skyworth all have multi-million unit production capacities. China has the capacity to manufacture 87-percent more televisions than its domestic market can absorb.

Chinese makers are undaunted by the complaint and are confident they will defend it successfully, just as they did the European Union dispute. Beginning this month, the U.S. Commerce Department continues its investigation.

This report is filed by Clint Stevens, China correspondent, APPLIANCE magazine.


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