Has China Become ‘Legally’ a Market-economy Country on 11 December 2016 under the WTO Antidumping Agreement? Analysing an Open Question

Abstract

The rules applicable to the antidumping investigation on China’s exports after the expiration of subparagraph (a)(ii) of Section 15 of China's Accession Protocol on 11 December 2016 are contentious. China immediately challenged both the EU and US regimes at the WTO claiming that the general WTO rules on price comparability must now be applied to its exports. The chapter concludes that Section 15(a)(i) of China’s Accession Protocol, as subsisting, still allows importing countries to treat China as a non-market economy in certain conditions. As a consequence, there is recourse to constructed value based on the prices and costs of an analogue third country instead of the domestic ones in China, if the latter are being distorted by state intervention. However, recourse to this alternative methodology cannot be ‘automatic’ anymore and the issue of which party has to prove that the imports at issue are distorted by state intervention becomes crucial.