Commission Implementing Regulation (EU) 2023/935 of 11 May 2023 imposing a definitive anti-dumping duty on imports of high tenacity yarns of polyesters originating in the People’s Republic of China and produced by Zhejiang Hailide New Material Co., Ltd

(168) The Commission found that Halead should be considered to be acting as an agent working on a commission basis rather than the internal sales department of Hailide. In its assessment the Commission took into consideration the relationship between the two companies in view of the ownership structure of the group as well as provisions of the contracts regulating the relationship of the two companies. The Commission analysed sales activities of both Hailide and Halead with particular attention to the existence of an internal sales department in Hailide. The Commission adduced consistent indicia to establish that Halead carried out functions comparable to those of an agent working on a commission basis. Hailide, on the other hand, failed to adduce evidence that an adjustment under Article 2(10)(i) of the basic Regulation is not justified. The claim was therefore rejected. Detailed analysis, due to its confidential nature, was provided to Hailide upon publication of this Regulation.

(169) In view of the above, and considering that a transfer of funds occurs between two related entities, the Commission was justified in examining whether the actual value of the mark-up differs from what an unrelated trader would obtain. Based on the nominal profit identified in this case, as explained in recital (153), the Commission did not consider the mark-up to sufficiently reflect a commission that would have been due in an arm’s length transaction. As mentioned in recital (163), the Commission therefore considered that an adjustment should be based on the SG&A of the trader and a nominal profit identified in this case.

(170) In its response to the final disclosure, Hailide requested an adjustment to constructed normal value to ensure fair comparison with the export price under Article 2(10) of the basic Regulation. According to Hailide, elements such as freight and insurance that could have been included in the SG&A used in the construction of the normal value should be removed from, as the same were deducted from the export price thereby creating asymmetry between the two.

(171) The Commission noted that Hailide failed to demonstrate that freight and insurance have been included in the SG&A used for the construction of the normal value. It follows that the requested adjustment was neither substantiated nor quantified and thus the request was rejected.

(172) The Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned to calculate the dumping margin, in accordance with Article 2(11) and (12) of the basic Regulation.

(173) In response to the final disclosure, Hailide raised a number of specific claims regarding the export sales via Hailide’s related importer in the Union. These claims related to adjustments for allowances attributable to the related importer, a clerical error in exchange rate used for conversion of CIF amounts, as well as deductible SG&A percentage and were accepted as valid. Moreover, the Commission noted and corrected a clerical error in the exchange rate used for conversion of allowances amount with respect to the sales of the related importer. As a result, Hailide’s dumping margin was recalculated and the revised calculations were subject to an additional disclosure.

(174) The definitive dumping margin thus established, expressed as a percentage of the CIF Union frontier price, duty unpaid, is 6,9 % for Hailide.

(175) The Commission considered that the provisions of Article 7(2) were applicable to set the level of the definitive duty.

(176) The like product was manufactured by six producers in the Union during the period considered. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

(177) The total Union production during the investigation period was established at around 117 000 tonnes. A part of the production, 22 322 tonnes, is subject to captive consumption. The Commission established the figure on the basis of all the available information concerning the Union industry, such as figures provided by the Union producers. As indicated in recital (12), three Union producers were selected in the sample representing more than 50 % of the total Union production of the like product.

(178) The Commission established the Union consumption on the basis of the sales volume of the Union industry on the Union market, plus the volume of imports of HTYP from all third countries. Since imports of HTYP from China were subject to measures during the period considered, the Commission used the statistics collected pursuant to Article 14(6) (91) of the basic Regulation (‘Article 14(6) database’) to establish the volume and average prices of imports from this country during the period considered, as it contained sufficiently detailed information at the level of the 10-digit TARIC codes and TARIC additional codes per company.

(180) The Union free market consumption within the period considered first decreased by 6 percentage points from 2018 until 2019, followed by a steep decrease of 10 percentage points due to Covid-19 in 2020. However, consumption then recovered and in the IP was 1 percentage point higher than in 2018.

(181) The Commission established the volume of imports as well as the market share of the imports on the basis of the Article 14(6) database which provides data per 10-digit TARIC Code and per exporting producer (TARIC additional code).

(183) Hailide’s exports from China to the Union decreased by 14 % over the period considered. Also, Hailide’s market share decreased over the period considered. Nevertheless, in the IP Hailide still maintained a high market share of [18 % – 23 %] of the Union market.

(184) The Commission established the prices of imports on the basis of the import statistics of the Article 14(6) database. Price undercutting of the imports was established on the basis of the comparison of the figures in the Article 14(6) database with the verified prices of the sampled Union producers.

(186) The import price of Hailide was volatile, decreasing by 23 % to a price of [1 300 – 1 400] EUR/ton in 2020 and then increasing by 14 percentage points in the IP. Despite the price recovery in the IP to [1 500 – 1 600] EUR/ton, this still shows an overall decrease of 9 % throughout the period considered. The increase in the IP was caused by increased transport costs and the post-Covid-19 recovery resulting in a high demand in the IP.

(188) In accordance with Article 3(5) of the basic Regulation, the assessment of the economic situation of the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

(189) As mentioned in recital (12), sampling was used for the assessment of the economic situation of the Union industry.

(190) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of the verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers. The data related to all Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers. The data related to the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.

(191) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the dumping margin, and recovery from past dumping.

(192) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

(194) The production volume first decreased by 14 % from 2018 to 2020 and then increased by 25 percentage points in the IP showing an overall increase of 11 % over the period considered. The production volume on the free market first decreased by 17 % from 2018 to 2020 and then increased by 23 percentage points in the IP, showing an overall increase of 6 % over the period considered. The capacity utilisation decreased from 2018 to 2020 by 17 %, but increased overall 8 % over the period considered.

(196) Total sales volume of the Union industry on the Union market decreased by 5 % during the period considered. The Union industry’s market share decreased by 2 percentage points during the period considered. The market share shows a declining trend over the period considered, interrupted by an intervening upward trend in 2020, which can be explained by the Covid-19 pandemic and the container shortage in 2020, which made shippings from East Asian countries more difficult.

(197) During the period considered, the free market consumption increased by 1 %, the sales volume of the Union industry decreased by 5 %, which translated into a loss in market share of 2 percentage points over the period considered.

(199) Due to the recovery of the demand in the IP, the employment of the Union industry increased by 1 % during the period considered, despite showing a negative trend from 2018 to 2020. Similarly, the productivity also decreased from 2018 to 2020 and turned positive for the period considered only due to the IP.

(200) Hailide’s dumping margin was above the de minimis level. The impact of the magnitude of the actual margin of dumping on the Union industry was substantial, given the volume and prices of Hailide’s imports from China. As mentioned above, Hailide’s prices undercut the Union industry prices by [17 % – 20 %]. Furthermore, Hailide’s import price as displayed in Table 4 was at least 23 % lower than the average import price from South Korea, at least 12 % lower than the import price from Taiwan and at least 42 % lower than the average import price from other third countries.

(202) The Union industry’s average unit sales price to unrelated customers in the Union decreased from 2018 to 2020 by 16 % and only partially recovered 12 percentage points in the IP reaching 1 957 EUR/tonne. The decline of the sales price is mostly linked to the pricing pressure from Chinese imports. In addition, in 2019 and 2020, the global economic slowdown has been affecting the prices of raw materials and, as a consequence, of industrial polyester yarn.

(203) The cost of production developed in a similar trend, partially due to decreasing raw material prices during the global economic slowdown in 2019 and 2020 and partially due to rationalisations like reducing staff during these years. In 2019 and 2020 the Unit cost decreased by 1 percentage point and 13 percentage points respectively. However, the prices decreased at a higher rate of 16 percentage points over these two years. This shows that the Union industry could not benefit from these cost decreases. In the IP, unit costs increased by 9 percentage points whereas the sales price increased by 12 percentage points. However, compared to the beginning of the period considered the prices decreased almost at the same percentage as the unit costs, showing that the prices were suppressed. The Union industry was not able to benefit from the cost decrease, it could not raise prices, and could not even maintain prices at their original level.

(205) The average labour costs per employee increased by 7 % over the period considered. This trend was only interrupted in 2020, partially due to rationalisations and partially due to Covid-19 pandemic specific measures like short-time work.

(207) The level of closing stocks of the sampled Union producers decreased by 9 % over the period considered. In the IP, the level of stocks represented around 12 % of their production.

(209) The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. The profitability of the Union industry was negative throughout the period considered. It started at -10 % in 2018 and extended the loss until 2020 at -17 %. In the IP, it could slightly improve to -8 % due to high demand.

(210) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow was negative throughout the period considered. While it gradually improved from 2018 to 2020, it dropped again in the IP. While it showed a 40 % improvement over the period considered it continued to be negative. Consequently, the improvement in cash flow does not indicate a stabilizing of the financial situation of the Union industry as it still remains negative.

(211) Investments decreased by 65 % over the period considered. Investments related to compliance improvements in relation to health, safety and environmental requirements, increase in the capacity and effectiveness of the production plants. While in 2018, investments in a capacity increase were possible, in the following years this was no longer possible.

(212) The return on investments is the profit in percentage of the net book value of investments. The return on investment from the production and sale of the like product followed similar trend as the profitability. It dropped from 2018 to 2020 and then in the IP returned to a level closer to 2018. It stayed negative throughout the entire period considered. Consequently, the return on investment indicates a negative financial situation of the Union industry over the entire period considered.

(213) The investigation showed that the overall situation of the Union industry on a macro level did not improve over the period considered as would be expected in a situation of increasing demand in the IP. Despite being protected as regards other exporters, exports of Hailide at low prices still were made under conditions which did not allow the Union industry to recover from injurious dumping. The volume of imports from Hailide were substantial throughout the period considered ([43 000 – 56 000]) resulting in an equally substantial market share ([18 %-28 %]), making Hailide the single biggest exporting producer on the Union market. Prices of Hailide were consistently below costs of production of the Union industry throughout the period considered and were found to undercut the Union industry’s prices by [17 % – 20 %] in the IP. Faced with such volume and price pressure, the Union industry’s prices were consistently below its cost of production making losses throughout the entire period considered. Even the fact of an increased demand in the IP did not lead to higher sales on the EU market than in the beginning of the period considered. Despite investments into a capacity increase, the Union was not able to even maintain its market share.

(214) The investigation has also shown that the situation of the industry on a micro level was not reaching a sustainable level and the industry incurred losses in the IP despite the fact that in the IP the demand had recovered from the economic downfall of the previous two years. The economic situation of the Union industry was thus injurious.

(215) On the basis of the above, the Commission concluded that the Union industry was suffering material injury within the meaning of Article 3(5) of the basic Regulation during the investigation period.

(216) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from Hailide caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from Hailide was not attributed to the dumped imports.

(217) During the entire period considered, Hailide’s exports represented a substantial share of the imports to the EU. Even though, Hailide’s market share decreased during the period considered by 3 percentage points, Hailide’s exports during the IP still represented [18 % – 23 %] of the Union market share. The price level of Hailide’s exports decreased by 9 % over the period considered: during the IP at [1 500 – 1 600] EUR/tonne it undercut the Union industries’ price by at least 17 %. As displayed in Table 8, the Union producers were able to decrease the unit cost of production by 5 % over the period considered. However, due to the pressure from Hailide’s low prices they were not able to increase their pricing level or even to maintain it to improve their profitability. Hailide thereby depressed the price level for the Union industry, contributing to a situation of continued losses over the period considered for the Union industry. There was a clear coincidence in time between the price pressure of Hailide’s imports representing an important market share of [18 % -23 %] and the injury of the Union industry. Therefore, due to the significant volume and price pressure exercised by Hailide’s exports there was a genuine and substantial relationship of cause and effect between the imports of HTYP from Hailide and the injury suffered by the Union industry.

(218) Hangzhou Huachun Chemical Fiber ceased to exist in 2021. Its exports have decreased by 99 % during the period considered and were below 1 % of the Union market share in the IP. Furthermore, the export price was significantly above of the Union industry price. Therefore, these exports did not contribute to the injury.

(221) By increasing their export volume to the European Union during the period considered by 17 % at prices below the Union industry’s prices, the producers subject to current duties have contributed to the injury of the Union Industry. The exporters currently subject to duties sold at 1 440 EUR/tonne in the investigation period, and showed an overall price decrease of 13 % throughout the period considered. These exporters were able to further extend their market share over the period concerned by 4 percentage points. The Commission therefore concluded that these exporters contributed to the injurious situation of the Union industry.

(222) However, these imports did not attenuate the link found between the dumped imports from Hailide and the material injury suffered by the Union industry such that this link can no longer be characterized as a genuine and substantial relationship of cause and effect. Hailide’s exports represented a market share of [18 % – 23 %] on the Union market during the IP, and its prices followed closely the prices of the other Chinese exporting producers, with anti-dumping duties added. This high market share, (which represents more than two thirds of the market share of the Union industry and as much as the market share of the total of all third countries excluding China) coupled with low prices has such an important weight on the market, that it exercised a significant independent price pressure on the Union industry.

(223) Accordingly, the effects of exports from other producers than Hailide, even if they contributed to the injury, did not materially diminish the relative importance of the Hailide’s dumped imports in bringing about the injury.

(224) The imports into the Union of HTYP from third countries other than China were mainly from South Korea, Vietnam and Taiwan.

(226) In the IP, 46 137 tonnes of HTYP were imported from third countries excluding China – this volume represents 20 % of the Union market. In total, their market share decreased from 2018 to 2020 from 18 % to 13 % and then increased to 20 % in the IP. This follows the trend of EU consumption, but in a more pronounced way. The average import price from third countries excluding China increased in 2019 by 5 %, then decreased 8 percentage points in 2020 and further decreased 6 percentage points in the IP. These imports mainly stem from South Korea (7 % of the Union Market), Vietnam (5 % of the Union market) and Taiwan (3 % of the Union market). Due to the fact that all these countries are located in East Asia, they were affected by the shipping container shortage and the resulting high shipping costs, which explains that in 2020 the market share of these third countries decreased.

(227) Imports from all third countries together have increased their market share on the Union Market by 2 percentage points. However, the average price of all third country imports in the IP, but also in all previous years of the period considered was substantially above the average EU sales price. Therefore, all third countries together have not contributed to the injury of the Union Industry. The Commission therefore analysed if imports from a specific third country have contributed to the injury of the Union industry.

(228) Imports form South Korea followed the trend of the EU consumption in a more accentuated way, decreasing from 2018 to 2020 and in the IP recovering closely above the level of 2018. The market share gradually decreased from 2018 to 2020 from 7 % to 5 % and then recovered to 7 % in the IP. The price level of South Korean imports gradually increased over the period concerned, with the exception of 2020, which shows a price decrease that can be linked to the low demand in that year.

(229) The price level of imports from South Korea during the IP as well as in the two preceding years was higher than the Union industry’s sales price. Due to the higher price level, the Commission concluded that imports from South Korea have not contributed to the injury.

(230) Imports from Vietnam where at a very low level from 2018 until 2020 representing a market share clearly below 1 % in that period, they increased in the IP to a quantity representing 5 % of the Union market share. This coincided with a price decrease from levels above the Union Industry’s average sales price to a price of 1 537 EUR/tonne in the IP, which is not only substantially lower than the Union Industry’s sales price, but also close to the price of Hailide’s exports from China of [1 500 – 1 600] EUR/tonne.

(231) However, Hailide’s exports to the EU in the IP were substantially higher. They amounted to [43 000 – 48 000] tonnes, whereas imports from Vietnam only amounted to 12 231 tonnes, thereby only representing a fraction of Hailide’s exports to the EU.

(232) Therefore, the Commission concluded that while imports from Vietnam may have contributed to the injury of the Union industry, they do not attenuate the causal link as the volume of imports from Vietnam represent only a small fraction of Hailide’s exports to the Union and do not have a comparable weight to put pressure on Union industry.

(233) Imports from Taiwan represented a market share of 3 % in the beginning of the period considered as well as in the IP. While the import price of 1 816 EUR/tonne in the IP was slightly lower than the Union Industry’s sales price, it was substantially higher than the price of Hailide’s exports from China of [1 400-1 600] EUR/tonne.

(234) Therefore, the Commission concluded that while imports from Taiwan may have contributed to the injury of the Union Industry, they do not attenuate the causal link as the volume of imports from Taiwan represent only a fraction of Hailide’s imports from China, their price was substantially above Hailide’s sales price for imports from China and do not have a comparable weight to put pressure on Union industry.

(235) Imports from Taiwan and Vietnam, when considered together with the imports from the Chinese exporters currently subject to duties, did not attenuate the link found between the dumped imports from Hailide and the injury suffered by the Union industry such that this link cannot be characterized as a genuine and substantial relationship of cause and effect. Hailide’s exports represented a market share of [18 % – 23 %] on the Union market during the IP and were sold, on average, substantially below the costs of production of the Union industry. Considering this magnitude and the resulting price pressure imports from Taiwan, Vietnam and other Chinese exporting producers did not materially diminish the relative importance of the dumped imports from Hailide in bringing about the injury.

(237) While export volumes over the period considered followed a similar trend than the sales on the Union market, in the IP, the volumes were only 2 % below the 2018 figures and recovered stronger than sales on the Union market, which were still 5 % below the 2018 volumes.

(238) The average price for exports in every year was clearly above the sales price on the EU market, in the IP it was more than 10 % higher. The average price for exports followed a trend similar to the prices on the EU market. However, while in 2020 the export price fell stronger, in the IP it recovered quicker than the prices on the EU market, reaching a level 3 % higher than the 2018 average price, whereas the sales price on the EU market in the IP was still 4 % below the 2018 price.

(239) The comparison shows that the Union producers are strongly committed to the Union market, while being able to reach higher prices for export sales.

(240) Therefore, the Commission concluded that the export performance of the Union industry has not contributed to the injury, but to the contrary contributed to limiting the loss.

(241) The captive consumption of the Union industry has substantially increased in the IP. Over the period considered it increased by 39 %. However, the decision to increase the captive consumption in order to sell downstream products at a higher manufacturing level, is not a cause of the injury of the Union industry, but rather a direct consequence of the dumped imports, since the Union producers were not able to reach a fair market price on the free market for HTYP due to the pricing pressure from the dumped imports. Therefore, the Commission concluded that this is not a factor contributing to the injury.

(242) As a reaction to a submission of the applicant on post-IP developments, several users together with a user association claimed that rising energy costs and inflation crisis breaks the causal link between imports of Chinese HTYP and the injury experienced by the Union industry. The rising energy costs and inflation, as submitted by the applicant, have however occurred post-IP. The users have not detailed that any such development occurred during the IP. Therefore, the Commission rejected this argument.

(243) There was a clear coincidence in time between the substantial imports from Hailide from China and the deterioration of the situation of the Union industry.

(244) The Commission has also investigated other factors of injury and has not found any other factor which would attenuate the causal link between Hailide’s exports from China and the material injury suffered by the Union industry to the extent that there was no longer any genuine and substantial relationship between imports from Hailide and the injury found.

(245) On the basis of the above, the Commission concluded that Hailide’s dumped exports from China materially contributed to the injury of the Union industry and that no other factors, considered individually or collectively, attenuated the causal link between the dumped exports of Hailide and the injury suffered by the Union industry.

(246) Based on the conclusions reached by the Commission on dumping, injury, causation and Union interest (examined under point 7 below), definitive measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

(247) To determine the level of the measures, the Commission examined whether a duty lower than the margin of dumping would be sufficient to remove the injury caused by dumped imports to the Union industry.

(248) The Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry. In this case, the injury would be eliminated if the Union industry was able to cover its costs of production, including those costs resulting from multilateral environmental agreements, and protocols thereunder, to which the Union is a party, and of ILO Conventions listed in Annex Ia of the basic Regulation, and was able to obtain a reasonable profit (‘target profit’) by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic regulation.

(249) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the level of profitability before the increase of imports from the country concerned and the level of profitability to be expected under normal conditions of competition. The Commission analysed the profits achieved by the sampled Union producers before the increase of imports from China. However, this was lower than the minimum 6 % required by Article 7(2c) of the basic Regulation. Thus, this profit margin was replaced by 6 % as required under Article 7(2c) of the basic Regulation.

(250) No claims were made that the Union industry’s level of investments, research and development (R & D) and innovation during the period considered would have been higher under normal conditions of competition.

(251) One sampled EU producer (Glanzstoff) could demonstrate the existence of future compliance costs within the meaning of Article 7(2d) of the basic Regulation. Amounts of 6,6€/tonne were added to the target price of the respective producer to reflect additional environmental costs during the period of application of the measures. This represents less than 1 % of the average production cost per tonne of Glanzstoff.

(252) On this basis, the Commission calculated a non-injurious price of the like product for the Union industry by applying the target profit margin of 6 % to the cost of production of the sampled Union producers during the investigation period.

(253) The Commission then determined the injury elimination level on the basis of a comparison of the weighted average export price of Hailide on a type-by-type basis, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers on the free Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value. The resulting average underselling margin at final disclosure was 39 %.

(254) In response to the final disclosure, Hailide raised number of specific claims regarding the export sales via Hailide’s related importer in the Union, as highlighted in detail in section 2.6 above. Moreover, the Commission noted and corrected a clerical error in the rounding of the figures for the injury margin. As a result, Hailide’s injury margin as well as the undercutting were recalculated. The Commission found that the recalculation did not have any material impact on the undercutting. The revised calculations were subject to an additional disclosure.

(256) In accordance with Article 21 of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers and users.

(257) The investigation has shown that the Union industry is suffering material injury because of the effects of dumped imports from Hailide from China that undercut Union industry’s prices, which are also adding to the price pressure exercised by the Chinese exporters already subject to duties. The Union industry was indeed not able to fully benefit from the imposition of anti-dumping duties against China.

(258) The Union industry will benefit from the extension of the existing measures to Hailide, which would likely prevent a further surge of imports from China at very low prices. Without measures, Hailide will continue to dump HTYP on the Union market preventing the Union industry from selling HTYP at an adequate price and thus causing further material injury to the Union industry.

(259) No unrelated importers cooperated in the current investigation.

(260) The Commission concluded that there were no compelling reasons from the position of unrelated importers against the imposition of measures against Hailide.

(261) There are several main groups of different HTYP users: tire producers who account for around 50 % of the HTYP demand in the Union and technical fabrics, tapes, webbings, straps, ropes and belt producers, who account for around 50 % of the HTYP demand in the Union. Technical fabrics, webbings, straps, ropes and belts are used in automotive, lifting, transport securing and all kinds of machine applications.

(262) Upon initiation, 64 known users and user associations in the Union were contacted and invited to cooperate. Following the initiation of the investigation, five users came forward together with a user’s association. The users that came forward belong to the segment of technical fabrics, tapes, webbings, straps, ropes and belt producers. The participating users represent 10 % of the Union consumption of HTYP. No user of the tire producer segment came forward.

(263) No user of HTYP produced by Hailide replied to the questionnaire. However, a user’s association together with five users of HTYP produced by Hailide provided submissions on the financial impact of the extension of the duties to Hailide, and the need for supply stability.

(264) Following the final disclosure, ten users, a user’s association as well as one integrated producer, which also produces woven products, commented on the final disclosure and opposed the Commission’s intention to impose anti-dumping duties on HTYP from Hailide.

(265) Several users together with the user’s association claimed that the analysis of the Commission is based on incomplete facts, since the Commission ignored the submissions from the user companies, who are SMEs, despite their offer for their data to be verified on the spot or via a remote verification.

(266) The Commission disagreed with this claim. In fact, as can be seen in the following sections, the Commission took into account the submissions of all users when analysing the Union interest, even though some specific data were submitted within a hearing presentation 64 days following the deadline, supplemented with more data 7 months following the deadline and too late to be the object of a verification. The Commission had already informed the parties of the passing of the deadline when they requested permission for a late submission of questionnaires two months following the deadline.

(267) The user’s association together with five users of HTYP produced by Hailide submitted the position that the level of existing duties against other Chinese exporters, from 5,1 % to 9,8 %, struck the right balance between the interests of EU producers of HTYP and user industries. Therefore, a continuation of the measures at the original levels could be absorbed by the user industry. While Hailide in the past was not subject to duties, a duty of 6,9 % on imports of Hailide is within the range of duties previously imposed against the other Chinese exporters. The Commission therefore concluded that there is no compelling reason from a financial aspect against the imposition of a duty against Hailide of 6,9 %.

(268) Following the final disclosure, ten users, the user’s association as well as the integrated producer argued that an additional cost increase coming from the duties on their main raw material will further erode their competitive position as EU based manufacturers. They provided multiple examples of offers from Chinese manufacturers of downstream products made with HTYP to European clients, whose prices were very close or even below the price of HTYP after addition of the proposed duties. They argued that the biggest problem of anti-dumping duties on HTYP from Hailide is that they do not extend to downstream products like fabrics, belts, lashing straps, round slings and webbing slings.

(269) Following the final disclosure, the applicants also argued that the main concern of the users are related to the unfair competition they are facing from China in downstream markets. This concern would be further exacerbated if anti-dumping duties on HTYP imports from Hailide are imposed. On the other hand, users repeatedly indicated that they did not oppose a prolongation of the original anti-dumping measures, whose range was from 5,1 % to 9,8 %.

(270) In order to address the issue of unfair competition on downstream products, five users together with a user’s association requested the Commission to extend the duties to HTYP contained in imported webbings ropes and fire hoses. They referred to the Commission’s Regulation on steel wind towers from China (92), in which the anti-dumping duty applied not only to wind towers, but also to wind turbines, which incorporate steel wind towers.

(271) First, the Commission acknowledges that the competition from Chinese exporters of downstream products limits the users’ possibility to increase prices and pass on the additional costs of increased duties. However, a potential unfair competition on the level of the users cannot by itself constitute a compelling reason for not addressing the injurious dumping found on the upstream market. While the users have demonstrated that the increased duties on HTYP cause a competitive disadvantage against Chinese manufacturers of the same downstream product, they have also indicated that a protection against these imports of downstream products could be reached by anti-dumping duties on these products. They have not demonstrated that it is not feasible for the user industry to file a complaint to initiate an investigation against potentially dumped imports of HTYP based fabrics or other secondary products.

(272) In addition, the anti-dumping duties imposed on HTYP from Hailide at 6,9 % are at the lower end of the duties that were already imposed on the other Chinese exporting producers. The users have argued several times that the original level of the duties struck a balance between the different interests. In addition, the users have the option to source supply from other third countries like South Korea, Taiwan and Vietnam, which are increasing their production capacity.

(273) Concerning the proposal to extend the measures to the HTYP incorporated in the downstream products, the Commission noted that, contrary to the steel wind towers case, the products to which the duties would be extended were not included in the product scope of the investigation. Indeed, the definition of the product concerned in the steel wind towers case already included the towers imported as part of a wind turbine: “The product concerned is certain utility scale wind towers of steel, […], currently falling under CN codes ex 7308 20 00 (TARIC code 7308200011), and ex 7308 90 98 (TARIC code 7308909811) and, when imported as part of a wind turbine , currently falling under CN codes ex 8502 31 00, …” The Commission cannot in principle impose duties on a product that was not within the scope of the investigation. In this case particularly, the Commission considered that the multitude of possible transformations covered within the suggested CN codes would expand the application of the duties beyond the scope of the investigation.

(274) Therefore, the Commission found that the request of the users would have expanded the scope of the investigation beyond the application. The request was thus rejected.

(275) Consequently, the Commission confirmed its initial position.

(276) The users have also pointed out a lack of capacity of the Union producers. The EU consumption of HTYP was 230 000 tonnes in the IP, 73 % higher than the production capacity of the Union industry, which amounts only to 134 000 tonnes. This demonstrates the overall need for imports.

(277) Furthermore, following the IP, in 2022 several Union producers have temporarily reduced or fully stopped their production as a reaction to the difficult situation caused by the dumped imports and also the temporary increase in energy prices in Europe. However, this situation occurred post-IP, and it was only a temporary measure. There is no indication at this stage that the temporary capacity reduction will be prolonged in the long-term, all the more so that the energy costs have in the meantime already significantly decreased.

(278) All cooperating users have argued that for their segment, only one Union producer provides the quality of HTYP used within their products, whereas other Union producers are to a large extent focused on supplying the tire industry or are integrated competitors. The users have further argued that other third countries either produce expensive specialised grades, like South Korea, or do not offer sufficient capacity or quality, with the exception of Vietnam.

(279) Exports from Vietnam during the IP had a 5 % Union market share. However, Vietnamese imports only amounted to 12 000 tonnes and cover only a fraction of the needed imports to satisfy the demand on the Union market. The Commission therefore noted that imports from China are generally needed to ensure the supply stability on the Union Market.

(280) The Commission concluded in the previous section that the duty against Hailide of 6,9 % is within the level of duties that could be absorbed by the users. Consequently, this level of duty will not have a prohibitive effect to continue to source from China, especially in view of the fact that the users still have the choice of an exporting producer at the lower end of the duties. Consequently, the supply stability will not be endangered by the imposition of duties on Hailide.

(281) Therefore, the Commission concluded that the interest of the users for supply stability does not lead to a compelling reason against the imposition of measures.

(282) Several users and the integrated producer emphasized the importance of the HTYP weaving and coating industry for the job market and the fact that the increased duties on HTYP may lead to a transfer of production capacities outside of the EU. The integrated producer argued that the workforce in the EU involved in the production of downstream products made out of HTYP consists of around 100 000 skilled workers.

(283) The Commission recognized that the HTYP weaving and coating industry is an important employer for the EU job market. However, as stated in recitals (272) and (274), the duty of 6,9 % imposed on imports of Hailide is within the level of duties that could be absorbed by the users. The Commission therefore concluded that the argument of a potential transfer of production capacities does not constitute a compelling reason against the duties on HTYP from Hailide. In addition, no concrete evidence was submitted to support these claims.

(284) On the basis of the above, the Commission concluded that there were no compelling reasons of the Union interest against the imposition of duties on Chinese exports of HTYP from Hailide.

(285) Following the above comments of users, the user’s association and one integrated producer, the Commission confirmed its assessment.

(286) Definitive anti-dumping measures should be imposed on imports into the Union of HTYP originating in China in accordance with the lesser duty rule in Article 9(4) of the basic Regulation. The amount of the duty should be set at the level of the lower of the dumping and the injury margins.

(288) The individual company anti-dumping duty rate specified in this Regulation was established on the basis of the findings of this investigation. Therefore, it reflected the situation found during this investigation with respect to this company. This duty rate is exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entity. Imports of product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to that specifically mentioned, shall be subject to the duty rates listed under Article 1 of Commission Implementing Regulation (EU) 2023/934 of 11 May 2023 imposing a definitive anti-dumping duty on imports of high tenacity yarns of polyesters originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) and a partial interim review pursuant to Article 11(3) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (93).

(289) To minimise the risks of circumvention, the company with individual anti-dumping duty must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(4) of this Regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to ‘all other companies’ under Article 1 of Implementing Regulation (EU) 2023/934.

(290) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rate of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(4) of this Regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the declaration and ensure that the application of the individual duty rate is justified and in compliance with customs law.

(291) The company may request the application of the individual anti-dumping duty rate if it changes subsequently the name of its entity. The request must be addressed to the Commission (94). The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a regulation about the change of name will be published in the Official Journal of the European Union.

(292) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (95), when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

(293) All interested parties were informed of the essential facts and considerations on the basis of which it was intended to impose the definitive anti-dumping duty on imports of HTYP originating in China and produced by Zhejiang Hailide New Material Co., Ltd. They were also granted a period to make representations subsequent to the disclosures. The comments submitted by interested parties were duly considered, and, where appropriate, the findings have been modified accordingly.

(294) The Committee established by Article 15(1) of Regulation (EU) 2016/1036 did not deliver an opinion on the measures provided for in this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 11 May 2023.

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 21.

(2) OJ L 315, 1.12.2010, p. 1.

(3) OJ L 49, 25.2.2017, p. 6.

(4) OJ L 167, 30.6.2017, p. 31.

(5) OJ C 87, 23.2.2022, p. 2.

(6) OJ C 248, 30.6.2022, p. 142.

(7) WT/DS295/AB/R, 29 November 2005.

(8) OJ C 248, 30.6.2022, p. 107.

(9) Notice on the consequences of the COVID-19 outbreak on anti-dumping and anti-subsidy investigations (OJ C 86, 16.3.2020, p. 6).

(10) Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China for the purposes of Trade Defence Investigations, 20 December 2017, SWD(2017) 483 final/2.

(11) E.g. Chemical Fiber Industry 13th Directive Opinion or Five-year plans for National Economic and Social Development.

(12) 14th Five-year plan for the Development of Petroleum and Chemical Industry in Zhejiang Province.

(13) Report – Chapter 2, p. 6-7.

(14) Report – Chapter 2, p. 10.

(15) Available at: Constitution of the People's Republic of China (npc.gov.cn), accessed on 15 November 2022.

(16) Report – Chapter 2, p. 20-21.

(17) Report – Chapter 3, p. 41, 73-74.

(18) Report – Chapter 6, p. 120-121.

(19) Report – Chapter 6. p. 122 -135.

(20) Report – Chapter 7, p. 167-168.

(21) Report – Chapter 8, p. 169-170, 200-201.

(22) Report – Chapter 2, p. 15-16, Report – Chapter 4, p. 50, p. 84, Report – Chapter 5, p. 108-9.

(23) See at: https://aiqicha.baidu.com/company_detail_51522707507210 (accessed on 18 November 2022).

(24) See for example Art. 33 of the CCP Constitution, Article 19 of the Chinese Company Law or the Guidelines on stepping up the United Front work in the private sector for the new era issued by the General Office of the CCP’s Central Committee in 2020.

(25) See at: cfa.com.cn (accessed on 21 November 2022).

(26) Report – Chapter 5, p. 100-1.

(27) Report – Chapter 2, p. 26

(28) See for example: Blanchette, J. – Xi’s Gamble: The Race to Consolidate Power and Stave off Disaster; Foreign Affairs, vol. 100, no. 4, July/August 2021, pp. 10-19.

(29) Report – Chapter 2, p. 31-2.

(30) Available at: https://www.reuters.com/article/us-china-congress-companies-idUSKCN1B40JU (accessed on 15 November 2022).

(31) Available at: www.gov.cn/zhengce/2020-09/15/content_5543685.htm (accessed on 15 November 2022)

(32) Financial Times (2020) – Chinese Communist Party asserts greater control over private enterprise, available at: https://on.ft.com/3mYxP4j (accessed on 15 November 2022).

(33) Report – Chapters 14.1 to 14.3.

(34) Report – Chapter 4, p. 41-42, 83.

(35) Available at: https://www.miit.gov.cn/zwgk/zcwj/wjfb/yj/art/2022/art_a01b7532a39a41e891d2540da6981d72.html (accessed on 17 November 2022)

(36) Optimize regional layout, strengthen international cooperation, promote digital transformation, eliminate backward production capacity and mergers and reorganizations in accordance with laws and regulations, cultivate leading enterprises, promote the integration and development of large and small enterprises, and consolidate and enhance industrial competitiveness.

(37) Ibid., Art. II.

(38) Available at: https://huanbao.bjx.com.cn/news/20210906/1175114.shtml (accessed on 17 November 2022).

(39) See Chapter V of the Plan.

(40) See Section 2.2.2. of the Plan.

(41) See Section 4.1.1. of the Plan.

(42) See Section 4.1.3. of the Plan.

(43) Available at: www.qg.gov.cn/zwgk/zcfg/sjfgwj/202112/t20211207_2666343.htm (accessed on 18 November 2022).

(44) See Section III.2.5. of the Plan.

(45) See Section III.4.1 of the Plan Available at:

https://huanbao.bjx.com.cn/news/20210707/1162695.shtml (accessed on 22 November 2022).

(46) Available at: https://huanbao.bjx.com.cn/news/20211201/1191133.shtml (accessed on 18 November 2022).

(47) See Section III.2.1 of the Plan.

(48) See the Plan, available at:

https://www.zj.gov.cn/art/2021/6/24/art_1229540815_4671249.html (accessed on 22 November 2022)

(49) See Section IV.7 of the Plan.

(50) Available at: https://www.cq.gov.cn/zwgk/zfxxgkml/szfwj/qtgw/202108/t20210803_9538603.html (accessed on 22 November 2022)

(51) See Section III.1.4 of the Plan.

(52) Report – Chapter 6, p. 138-149.

(53) Report – Chapter 9, p. 216.

(54) Report – Chapter 9, p. 213-215.

(55) Report – Chapter 9, p. 209-211.

(56) Report – Chapter 13, p. 332-337.

(57) Report – Chapter 13, p. 336.

(58) Report – Chapter 13, p. 337-341.

(59) Report – Chapter 6, p. 114-117.

(60) Report – Chapter 6, p. 119.

(61) Report – Chapter 6, p. 120.

(62) Report – Chapter 6, p. 121-122, 126-128, 133-135.

(63) See official policy document of the China Banking and Insurance Regulatory Commission (CBIRC) of 28 August 2020: Three-year action plan for improving corporate governance of the banking and insurance sectors (2020-2022), available at: http://www.cbirc.gov.cn/cn/view/pages/ItemDetail.html?docId=925393&itemId=928 (accessed on 15 November 2022). The Plan instructs to ‘ further implement the spirit embodied in General Secretary Xi Jinping’s keynote speech on advancing the reform of corporate governance of the financial sector’. Moreover, the Plan’s section II aims at promoting the organic integration of the Party’s leadership into corporate governance: ‘we shall make the integration of the Party’s leadership into corporate governance more systematic, standardised and procedure-based […] Major operational and management issues must have been discussed by the Party Committee before being decided upon by the Board of Directors or the senior management.’

(64) See CBIRC’s Notice on the Commercial banks performance evaluation method, issued on 15 December 2020. http://jrs.mof.gov.cn/gongzuotongzhi/202101/t20210104_3638904.htm (last viewed on 12 April 2021).

(65) Available at: https://huanbao.bjx.com.cn/news/20211201/1191133.shtml (accessed on 18 November 2022).

(66) See Paragraph 3 of the Section Safeguard Measures of the Plan.

(67) Available at: https://huanbao.bjx.com.cn/news/20210906/1175114-3.shtml (accessed on 22 November 2022)

(68) See Section 8.7. of the Plan.

(69) See IMF Working Paper ‘Resolving China’s Corporate Debt Problem’, by Wojciech Maliszewski, Serkan Arslanalp, John Caparusso, José Garrido, Si Guo, Joong Shik Kang, W. Raphael Lam, T. Daniel Law, Wei Liao, Nadia Rendak, Philippe Wingender, Jiangyan, October 2016, WP/16/203

(70) Report – Chapter 6, p. 121-122, 126-128, 133-135.

(71) See OECD (2019), OECD Economic Surveys: China 2019, OECD Publishing, Paris. p. 29, available at:

https://doi.org/10.1787/eco_surveys-chn-2019-en (accessed on 15 November 2022).

(72) See: http://www.gov.cn/xinwen/2020-04/20/content_5504241.htm (accessed on 22 November 2022).

(73) World Bank Open Data – Upper Middle Income, https://data.worldbank.org/income-level/upper-middle-income.

(74) If there is no production of the product under investigation in any country with a similar level of development, production of a product in the same general category and/or sector of the product under investigation may be considered.

(75) Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries, OJ L 123, 19.5.2015, p. 33.

(76) See https://www.kordsa.com/en/images/pdf/Kordsa_Annual_Report_EN_2021.pdf, p. 160.

(77) See https://www.kordsa.com/en/images/pdf/Kordsa_Annual_Report_EN_2021.pdf, p. 117.

(78) World Bank Open Data – Upper Middle Income, https://data.worldbank.org/income-level/upper-middle-income.

(79) p. 133 of 2021 Annual Report.

(80) p. 61 of 2021 Annual Report available on https://www.kordsa.com/en/images/pdf/Kordsa_Annual_Report_EN_2021.pdf

(81) See Kordsa_Annual_Report_EN_2021.pdf, p. 158, Note 3 -Segment reporting, a) External revenue as well as the Directory on p. 205 of the annual report.

(82) http://www.gtis.com/gta/secure/default.cfm

(83) http://www.macmap.org

(84) https://data.tuik.gov.tr/Bulten/DownloadIstatistikselTablo?p=tg4QGRdNcBVDQo/mmOOyD/8g3GlHdKhwM0SMnhh4V/APyz9UrZvk0kK90vktK5jo

(85) Article 2(7) of the basic Regulation considers that domestic prices in those countries cannot be used for the purpose of determining normal value.

(86) The labour costs are available at https://data.tuik.gov.tr/Bulten/DownloadIstatistikselTablo?p=tg4QGRdNcBVDQo/mmOOyD/8g3GlHdKhwM0SMnhh4V/APyz9UrZvk0kK90vktK5jo

(87) https://data.tuik.gov.tr/Bulten/Index?p=Consumer-Price-Index-December-2021-45789

(88) https://data.tuik.gov.tr/Kategori/GetKategori?p=cevre-ve-enerji-103&dil=2

https://data.tuik.gov.tr/Bulten/Index?p=Electricity-and-Natural-Gas-Prices-Period-II:-July-December,-2021-45566

https://data.tuik.gov.tr/Bulten/Index?p=Electricity-and-Natural-Gas-Prices-Period-I:-January-June,-2021-37459

(89) Recital (352) of Commission Implementing Regulation (EU) 2020/1336, of 25 September 2020 imposing definitive anti-dumping duties on imports of certain polyvinyl alcohols originating in the People’s Republic of China (OJ L 315, 29.9.2020, p. 1).

(90) Commission Implementing Regulation (EU) 2021/2011 of 17 November 2021 imposing a definitive anti-dumping duty on imports of optical fibre cables originating in the People’s Republic of China, OJ L 410, 18 November 2021, p. 51, recital 367.

(91) The 14(6) database contains data on imports of products subject to anti-dumping or anti-subsidy measures or investigations, both from the countries and exporting producers concerned by the proceeding and from other third countries and other exporting producers, at the level of the 10-digit TARIC codes and TARIC additional codes.

(92) Commission Implementing Regulation (EU) 2021/2239 of 15 December 2021 imposing a definitive anti-dumping duty on imports of certain utility scale steel wind towers originating in the People’s Republic of China. OJ L 450, 16.12.2021, p. 59 (‘the steel wind towers case’).

(93) See page 1 of this Official Journal.

(94) European Commission, Directorate-General for Trade, Directorate G, Rue de la Loi 170, 1040 Brussels, Belgium.

(95) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).