The Ministry of Commerce of China File photo: VCG

China's Ministry of Commerce (MOFCOM) announced on Tuesday that it has launched an anti-circumvention investigation into certain optical fiber products imported from the US, marking the first time that China has initiated such an investigation.

The ministry said in a notice that it has learned that relevant fiber optic products are suspected of circumventing China's anti-dumping measures, and it initiated the probe at the request of domestic industries. Based on the investigation's findings, a decision will be made on whether to impose anti-circumvention measures against the US, the notice said.

An anti-circumvention investigation is a trade remedy inquiry initiated to address actions that circumvent existing anti-dumping or countervailing measures. This type of investigation is widely used by WTO members to ensure the effectiveness of trade remedy measures, it said.

On February 10, Changfei Fiber Optic Cable Co submitted an application to the investigating authority, alleging that in recent years, US fiber optic manufacturers or exporters had taken advantage of the high compatibility, similarity and substitutability among related fiber optic products to evade existing anti-dumping measures by altering the reported tariff codes, the Xinhua News Agency reported on Tuesday, citing the MOFCOM.

The evidence submitted by the applicant shows that in recent years, the import volume of US products under tariff codes subject to anti-dumping measures has significantly decreased, while the import volume of the investigated products under tariff codes not subject to anti-dumping measures has surged dramatically. Under the impact of these circumventing imported products, the domestic industry has suffered severe damage, and the effectiveness of the existing anti-dumping measures has been significantly undermined, Xinhua reported.

Shi Xiaoli, director of the WTO Law Research Center at China University of Political Science and Law, said that the investigation is in line with both Chinese laws and WTO practices. 

"Due to suspicions that related US fiber optic products are evading existing anti-dumping measures through large-scale low-price exports, which have caused significant difficulties for the domestic industry, initiating this investigation aligns with China's legal provisions and the common practices of WTO members," Shi told the Global Times on Tuesday.

China's Foreign Trade Law stipulates that the state may take necessary anti-circumvention measures against the activities circumventing the foreign trade remedies provided under the law.

According to Shi, the investigation will include written questionnaires, hearings and on-site verification and will last for six months. If the investigation confirms the existence of circumvention behavior, authorities may take necessary anti-circumvention measures, such as expanding the scope of taxation, she said.

Shi also noted that US President Donald Trump's administration has frequently introduced trade restrictive measures against China, severely disrupting the international trade order, and it is necessary for the Chinese government to heed calls from domestic industries to take corresponding measures. 

By initiating China's first anti-circumvention investigation into related fiber optic products imported from the US, the MOFCOM aims to curb potential circumvention by US producers or exporters. "This action will help enrich China's trade remedy investigation practices and strengthen the protective effectiveness of its trade remedy measures," Shi said.