China slapped by EU tariffs as high as 66%
MAINLAND CHINA & HONG KONG
The European Union (EU) imposed tariffs as high as 66.4% on steel road wheels from China, targeting manufacturers such as Zhejiang Jingu Co Ltd and Xingmin Intelligent Transportation Systems Co Ltd.
The duties punish Chinese exporters of steel wheels for vehicles including cars, tractors, and trailers for allegedly having sold them in the EU below cost, a practice known as dumping. The European market for such wheels is worth an estimated EUR800m (USD881m).
Dumped imports of steel road wheels from China caused “material injury” to EU-based manufacturers of the goods, the European Commission, the 28-nation bloc’s executive arm in Brussels, said on Thursday (10 October) in the Official Journal.
The anti-dumping duties represent the preliminary outcome of a probe opened in February based on a dumping complaint by the Association of European Wheel Manufacturers. The levies, due to take effect on Friday, will last for six months and may be prolonged for five years.
The EU has 11 manufacturers of steel road wheels, according to the commission, which took the unusual step of declining to identify any of them. European producers requested anonymity “on grounds of a fear of retaliatory measures by some of their customers”, the commission said.
The EU industry employs 3,600 people mainly in Germany, France, Spain, the Czech Republic, Italy, Romania, and Poland, the commission said in a subsequent emailed statement about the case.
Chinese exporters’ combined share of the EU market for steel road wheels doubled to 5.3% last year compared with 2015, the commission said in its decision published in the Official Journal.
The rates of the provisional anti-dumping duties are 50.3% against 19 specifically named Chinese exporters – including Zhejiang Jingu and Xingmin Intelligent Transportation Systems – and 66.4% for all others.
Separately on Thursday, the commission threatened to stoke longstanding tensions with China over steel trade by opening an inquiry into whether Chinese producers of hot-rolled, stainless-steel sheets and coils receive market-distorting government aid.
The probe, which also covers Indonesia and is due to last as long as 13 months, could lead to EU anti-subsidy duties on imports of these steel products – used for other kinds of steel and for tubes – from both countries. Hot-rolled, stainless-steel sheets and coils from China, Taiwan, and Indonesia face a separate threat of European anti-dumping duties as a result of an investigation opened in August.
The EU already has anti-dumping and/or anti-subsidy levies on a range of other products imported from China, the biggest producer of the metal with around half the world’s output. – Bloomberg News.
The Shanghai Composite Index gained 0.78% to 2,947.71 on Thursday while the Hang Seng Index inched 0.10% higher to 25,707.93.
REST OF ASIA
Singapore’s central bank will probably ease monetary policy for the first time in more than three years as a global slowdown continues to weigh on the export-reliant economy.
A majority of the economists surveyed by Bloomberg predict the Monetary Authority of Singapore (MAS) will reduce the slope of its currency band by 50 bps on Monday (14 October), implying a more gradual pace of appreciation in the local dollar. The MAS uses the exchange rate, rather than interest rates, as its main policy tool.
Central banks around the world are loosening policy to guard against the global slowdown and escalating US-China trade tensions. In Singapore, authorities are taking a gradual approach, as they monitor risks and watch the job market closely.
“The global slowdown continues to weigh on the domestic sector, with significant implications on the labour market,” Irvin Seah, senior economist at DBS Group Holdings Ltd in Singapore, said in a research note. “A robust fiscal budget is expected early next year to render support for the economy while the MAS will most likely ease the monetary policy stance moderately.”
DBS analysts are among those seeing a 50-point reduction in the slope of the currency band on Monday.
The downturn may prompt a more aggressive move by the MAS, according to eight of 22 economists in the Bloomberg survey. They predict the central bank will move to a flat slope – meaning it would not seek an appreciation in the exchange rate.
Manufacturing remains the hardest-hit sector, while other parts of the economy are still relatively healthy, and retrenchments have not yet significantly increased. Industrial output plunged in August by the most in almost four years, with electronics posting its worst production since 2012. – Bloomberg News.
South Korea’s benchmark Kospi Index rose 0.84% to 2,045.20 on Friday morning, reversing the previous session’s 0.88% loss to 2,028.15.
Shares in Sydney were up 0.73% Friday morning with the S&P/ASX 200 Index at 6,594.60. The index was little changed at 6,547.08 the previous session.Taiwan’s market was closed Thursday for National Day.
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