The Chinese Ministry of Commerce (MOC) claims that US fibre optic cable producer Corning has dumped certain single-mode optical fibre products exported from the US into China and caused ‘material injury’ to Chinese domestic producers.
The MOC initiated the anti-dumping investigation on July 1, 2003 against certain standard single-mode optical fibre products originating from the US, Japan and Korea, alleging that foreign products were being imported and sold at lower prices than the market conditions justified, and that Chinese domestic producers were injured as a result. The investigation was based on a complaint filed by two Chinese fibre manufacturers.
Following the results of this preliminary determination from the MOC, representatives from the MOC will now travel to the US to meet with Corning officials to verify the truth of the information provided by Corning in its defence. The MOC will then provide a final determination, which Corning expects to receive by the end of this year. If the final determination is adverse, Corning may still be able to appeal within the MOC or the Chinese legal system.
“Corning believes that it has not dumped optical fibre into China and that the company has not caused injury to the Chinese domestic producers,” said Robert B. Brown, senior vice president and general manager, Corning Optical Fiber.
“We are extremely disappointed with this preliminary determination, and we will continue to cooperate with the MOC through the final determination to prove our position. We remain committed to the Chinese optical fibre market and to maintaining our strong customer relationships within the region,” he added.
Even so, on the basis of the preliminary determination, Chinese importers of certain Corning single-mode optical fiber products will be required to make cash deposits of 16% of the purchase price to Chinese customs authorities.
Corning says that it is not able to estimate the impact of this preliminary determination on its fibre export business to China, but if the ruling holds, it says that it could have a significant negative impact on the company’s ability to export fibre into China.
The company’s fibre export revenues to China currently are approximately 6% of its optical fibre and cable revenues. Corning said that the impact of any potential loss of fibre export volume to China on the company’s expected earnings per share should be less than $0.01 in the second half of 2004.