ITC FINDS ‘MASSIVE’ DUMPING OF COLOR TVs

Commerce Dept. investigators reported evidence of “massive imports” of color TVs from China in the run-up to the dept.’s preliminary decision this week that recommended antidumping duties of up to 45.8% on the sets (CED Nov 25 p1). The investigators’ finding of “critical circumstances” stemmed from a move by Chinese manufacturers to increase exports of 21"-and-up TVs to the U.S. ahead of the release of the preliminary decision that will form the basis for a final ruling in April.

“We find there is a reasonable basis to believe or suspect importers had knowledge of dumping and the likelihood of material injury with respect to CTVs from the PRC [People’s Republic of China],” according to a report signed by James Jochum, asst. secretary for import administration at the Commerce Dept.: “We further find that there were massive imports of CTVs over a relatively short period from each of the mandatory respondents.”

Commerce’s preliminary ruling covered a dozen companies that exported CTVs from China to the U.S. The proposed duties ranged from 27.94% imposed on exports by Konka Group, to 45.87% for Sichuan Changhong Electric Co. Haier, Hisense, Philips, Shenzhen Chaungwei Electronics, Starlight International Holdings, Star Light Electronics, Star Fair Electronics, Starlight Marketing Development and Shanghai Video were pegged at 40.84%, while TCL Holding and Xiamen Overseas Chinese Electronic were at 31.35% and 31.70%, respectively. Commerce based its decision partly on monthly shipping data obtained from Changhong, Konka, TCL and Xiamen for 2001-2003 that showed shipping volume increased more than 15%. Xiamen unsuccessfully sought to have HDTVs excluded from the investigation, arguing they were produced in limited quantities and differed in characteristics and uses from the CTVs at the core of Five Rivers’ complaint, Commerce said.

Commerce defined dumping as the sale of an export good at a price below the home market or a 3rd-country price, or below production cost. The dumping margin is the price difference expressed as a percentage of the export price. The petition was filed in May by Five Rivers Electronic Innovations and 2 U.S. labor unions representing TV assembly workers at Toshiba and Sanyo factories in Horseheads, N.Y., and Forest City, Ark. Five Rivers sought the imposition of tariffs of up to 84% and 46% on goods from China and Malaysia, respectively. Commerce recommended antidumping duties of 0.03% be imposed on products from Malaysia, where Funai has a plant.

Several Chinese manufacturers sought to downplay the effect of Commerce’s decision. “The impact is minimal. We are looking at an impact of 1%-2% of our total revenue,” a TCL International Holdings spokeswoman said told the Dow Jones newswire. The TCL spokeswoman said the products in dispute, 21” and up CRT-based color TVs, accounted for 20%-30% of its TV exports to the U.S., or 200,000-300,000 units a year. Exports to the U.S. account for 30% of TCL’s total, which in turn contribute 15% of its annual revenue, the spokeswoman said. TCL also has factories outside of China that won’t be affected by the ruling, including one in Vietnam, and subcontractors in the Philippines and Indonesia. The firm agreed with Thomson recently to combine DVD and TV operations.

Thomson came out swinging in TCL’s defense Wed., with a spokesman in Paris telling Reuters that the company saw “nothing positive” in Commerce’s preliminary decision. “As a global company with operations in over 100 countries, Thomson strongly supports the development of international trade and is opposed to any practices that would hamper this goal,” a Thomson spokeswoman told Reuters. “The ITC work on antidumping has been common knowledge over the years and so changes nothing to Thomson’s strategy in China and with its Chinese partners,” the spokeswoman said.

Some analysts saw short-term benefits for the group. Thomson, which markets the RCA and Scenium branded products in the U.S., could benefit if the decision increases TV prices here, said a Dresdner Kleinwort Wasserstein research note. The risk of a U.S. antidumping ruling also could have prompted TCL to form the venture, which as a U.S. company with manufacturing facilities in China would not be subject to the import duties, it said. Thomson has manufacturing facilities in Marion, Ind., and Circleville, O., as well as Mexico and Europe.

Chinese TV manufacturer Skyworth Digital Investor Relations Gen. Mgr. Maggie Mak also said Commerce’s decision would have little impact on her company. In its fiscal year ended March 2003, Skyworth sold 5,000 TVs in the U.S. It sold 1.85 million units total overseas. In the 6 months to Sept. this year, Skyworth’s TV exports to the U.S. totaled fewer than 1,000 units, she said. Skyworth intends to enhance its existing production lines in Mexico or develop facilities in Southeast Asia as part of strategies to tackle the U.S. market, Mak said. It also will explore possibilities of cooperating with U.S. companies with extensive sales and marketing networks, with the aim of developing OEM business.