South Korean petrochemical makers have also fallen victim to Beijing’s persistent retaliation on Korean enterprises for Seoul’s deployment of a U.S. antimissile system on the Korean soil.
According to the Korea International Trade Association on Thursday, Korean petrochemical products have been met by the Chinese government’s unusually frequent investigations into alleged dumping in recent months. Data showed that out of the 11 anti-dumping related cases involving Korean exports to China over the past ten years, four have been raised just in the past year.
“China’s launching of four anti-dumping investigations in the petrochemical sector alone is unprecedented,” said a company official, who asked to remain anonymous because of the sensitivity of the topic.
Business relations between the two countries have become strained since July 2016 as Beijing began to take retaliatory steps in opposition to Seoul’s deployment of the Terminal High Altitude Area Defense (THAAD) system for protection against the growing nuclear and missile threat from North Korea. China fears the system’s powerful radar could be used to spy on its military.
Amid the ongoing diplomatic spat, a growing number of Korean companies ranging from automakers to retail companies are grappling with plunging sales in the country and tougher regulations imposed by the Chinese government against their businesses.
The latest crackdown has affected some of Korea’s major petrochemical companies, including LG Chem Ltd., Hanwha Chemical and Lotte Chemical Corp.
China recently imposed anti-dumping tariffs on polyacetal, a thermoplastic used in auto parts and construction material because of its superior insularity and heat-resistance. Korean manufacturers currently command about a 30 percent share together in China’s polyacetal market. The probe into the product, which began October last year, ended with the Chinese commerce ministry slapping preliminary duties of 30.4 percent on LG Chem, 30.0 percent on Korea Engineering Plastics Co. and 6.1 percent on Kolon Plastics Inc.
A sudden re-investigation into Korean-made polysilicon last November also suggests the probe is more politically-driven, according to industry observers. Polysilicon is a polycrystalline form of silicon that converts light energy into electricity, making it a key component for silicon-based solar cells. It is the mainstay export item of Hanwha Chemical and OCI for which they have already received anti-dumping duties.
Beijing’s excessive anti-dumping crackdown is raising concerns among Korean manufacturers that business in China could become more difficult if they become further weighed down by tougher trade barriers.
By Lee Jae-cheol
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]