In the interest of ensuring the global economy continues its recovery, China and the U.S. should maintain their "common sense" in their latest trade arguments, which have also affected television manufacturing operations at Dutch consumer electronics giant Royal Philips Electronics N.V., the company's CEO said.
"I hope everybody keeps their common sense," said Gerard Kleisterlee, Philips' chairman and CEO.
He said he was "very unhappy" that the threat by the U.S. to levy dumping charges on some Chinese television makers was initiated by a small firm and cautioned against allowing "specific interests" to override bigger issues such as getting the world economy growing again.
Mr. Kleisterlee, speaking with foreign journalists in Shanghai at the end of a week-long tour in China, said his company exports large-sized TVs from its operations in Suzhou (a city just west of Shanghai) to the U.S.
This comes after the U.S. Commerce Department announced in a late-November preliminary ruling that some Chinese television makers are dumping their products to the tune of 28 to 46 percent in the U.S. market. The petition was filed last May by a Tennessee electric appliance company, Five Rivers Electronic Innovations, and two U.S. labor unions of television assembly workers.
Although the final ruling won't come until April, U.S. importers of Chinese television sets will have to start depositing money in an escrow account with the U.S. government equivalent to the margins of dumping.
"It does affect Philips operations," Mr. Kleisterlee said. He added that while his company can shift TV production to its Mexico plant, "we would rather prefer to continue our supply in China because of the good economic terms."
The announcement by the U.S. on possible dumping of Chinese TVs came a week after it slapped safeguard sanctions on some Chinese textiles. That was then followed by a warning from China it could block unspecified U.S. imports if the U.S. doesn't drop steel tariffs that the World Trade Organization deemed illegal.
Mr. Kleisterlee said he expects China to surpass the U.S. to become Philips' largest market in 2007, a year in which the firm has said it aims to nearly double its revenue from China to U.S. $12 billion, from last year's $6.7 billion. (Dow Jones)
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