"We will appeal to the World Trade Organization against the US Department of Commerce's idea to impose anti-dumping duty on automotive replacement glass (ARG) windshields exported to the United States by Fuyao group,'' said Cho Tak-wong, chairman of Fuyao Glass Industry Group Co Ltd.
The US Department of Commerce's decision is unacceptable and groundless, because the group it did not follow the principle of seeking a fair and objective judgment, Cho said from his headquarters located in Fuqing of East China's Fujian Province.
"We decided to bring the action in order to clarify facts and protect our legitimate rights,'' he said.
According to Cho, three US glass producers -- PPG Industries, Inc, Apogee Enterprises, Inc and Safelite Glass Corporation -- petitioned the US Department of Commerce and the US International Trade Commission (ITC) jointly in February last year, alleging that Chinese producers have caused them material injury by importing ARG windshields at unfairly low prices.
They claimed Chinese producers have violated US laws and international trade rules. At the request of three US producers, the two US agencies decided to review the petition and initiated an investigation into the allegations on March 20 last year.
As the biggest ARG windshield supplier in China, the Fuyao group immediately hired US lawyers engaged in cases of anti-dumping to respond to the investigation.
It also co-operated on a submitted response to the department's questionnaire seeking volume and value of US sales information and offered the department detailed materials on cost and its composition, according to Cho.
"We showed trust in the fairness of the US law and confidence in winning the lawsuit,'' Cho said. "And it is our belief that the anti-dumping allegations is groundless, because the US annual demand for windshields stands at around 29 million, among which 16 million pieces are sold to original equipment manufactures and 13 million are used for ARG windshields.
"However, national imports from Chinese producers are less than 2.2 million, which poses no threat to the US market.''
On April 17 last year, the ITC issued its affirmative preliminary determination that there was a "reasonable indication" that the industry in the United States was being materially injured by imports from China.
On September 19 last year, the US Department of Commerce preliminarily determined that the dumping margin for Fuyao group was 9.79 per cent but this was then changed to 3.04 per cent by the department on September 30.
After the department's personnel visited the group between November 4 to 9, the department made its final determination on the group's dumping margin as 9.67 per cent.
On March 18 the ITC decided that imports from China do hurt the US industry.
According to Cho, the final anti-dumping margin imposed by the department on Fuyao group is 11.8 per cent while those imposed on the other Chinese producers range from 3.71 per cent to 124 per cent. The margins become effective this month.
"We express regret over the department's determination. As a listed company that is privately owned and foreign-funded, our group has no element of government ownership and hence receives no subsidy from government," Cho said.
"We completely follow the rules of the market, which mean standardization and transparency.
"In addition more than 65 per cent of the float glass that we use for production of windshields are imported from Indonesia, Thailand and South Korea, which are all market economy nations.
"However, the department refuses to adopt data on the real purchasing cost from these countries on the grounds that the department has reason to believe or suspect the market prices in these countries are subsidized.''
Cho added: "Instead it selected the average import price cost in India as surrogate, which is more than 60 per cent higher than the group's real purchasing cost.
"As a result the dumping margin imposed on the group is raised from 1.35 per cent to 11.8 per cent while that lower than 2 per cent will not result in the imposition of anti-dumping duties.''
As for the accusation that group sells its product at an unfairly low price, Cho mentioned that its import price to the US last year was US$31.8 per square metre, vastly higher than the price of US$18.5 per square metre offered by other Chinese producers or exporters, even higher than some US producers.
The group has gained a foothold in the US market by guaranteeing the high quality of its product, he said.
The case will mean big losses for Chinese glass producers in the United States, with sales currently at US$100 million annually.
Cho stated that the imposition of anti-dumping duties will have an impact on the profit of its business in the US but no influence on its operations in the domestic market.
He also disclosed that with the development of China's automobile industry, the group will change its current strategy and attach more importance to the domestic market and gradually reduce imports to the United States.
In the next decade the proportion of the group's turnover in the US market will decrease by less than 10 per cent in terms of its whole business volume.