EUROPEAN UNION WAIVES DUTY ON CHINESE TVs
European Union (EU) conditionally waived 44.6% antidumping duty on TV sets from 7 Chinese manufacturers, giving them shot at tackling European market. EU and set makers, which had been wrangling ever since EU slapped punitive import tariff on China- made TVs in 1991, agreed to drop duty with quota, provided that minimum price level wasn’t violated. If any of 7 companies -- Haier Electrical Appliances, Hisense Import & Export Co., Konka, Sichuan Changhong Electric, Skyworth Multimedia, TCL King Electrical Appliances and Xiamen Overseas -- breaks price pact, duty will be reinstalled.
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Analysts were divided on which company would benefit most from dropping of duties, which stemmed from EU dumping investigation into China-made TVs that began in 1988. Tariff was raised to 44.6% in 1998, virtually blocking Chinese-made sets from European market. Xiamen filed petition to have case reexamined in 2000 and EU’s change in position followed China’s entry into World Trade Organization and moves by European manufacturers to open factories in China. Skyworth appeared to be leading candidate given its strong TV export business, one analyst said. TCL also could have edge in light of its recent agreement with Philips to distribute latter’s products in China. Pact could evolve into Philips’ distributing TCL products in Europe, analysts said. Agreement also is likely to take some pressure off Chinese manufacturers that have been suffering from overcapacity and vicious price war in domestic market.
Full details of export restraint agreement between EU and Chinese manufacturers weren’t disclosed, but source told South China Morning Post (SCMP) that accord included ban on selling sets below production costs. China exported 9 million TVs in first 7 months of this year, 40% increase from year ago, despite small market in EU, BNP Paribas Peregrine Chief China economist Chen Xingdong told SCMP. China produced 23.8 million TVs in first half of this year, while Chinese consumers bought 24.6 million, reducing country’s unsold inventory levels 13.1% to 5.24 million units. “Being able to export to the European Union is a very good thing,” unidentified Konka official told Reuters. In 2000, Konka exported one million TVs to Europe, but since then “not one set” has gone to region, Konka official said, because “it was just too expensive.” Konka exported 243,438 sets worldwide in 2001 and earlier this year closed offices in U.S., where it had made 2-year run at retail market with commodity- driven direct-view TVs. It had developed U.S. plans for digital TVs as well, but postponed introduction last year.