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Electric Bicycles Investigated By EU Antidumping ,who's Behind This?
Nov 13, 2017

A petition from the European Union has caused a storm in the way of China's electric bikes to oversea. At the end of last month, the European Commission launched an anti-dumping investigation into electric bicycle products originating in China.


This is not the first time that the EU has shut out China's bicycle products. As early as 25 years ago, the European Union relied on trade protection to make ordinary bicycle products from China have been heavily taxed for many years, and the boom in China's bicycle trade in the European market was halted.


"This is the EU use policy of a big market reshuffle." "November 9, electric bicycle manufacturer Jinhua Zhuo Yuan Industrial Co., Ltd. General manager Xiangcan told the Economic Observer that once the investigation was established, will give a devastating impact on electric bicycles from China.


Not only are Chinese companies unhappy. The European Union's pleadings also worried the Dutch brand ton van den Oetelaar. "Ordinary consumers, as the largest buyer group, may not buy (electric bikes) again." He predicts to the economic observer that electric bikes will become expensive when anti-dumping duties come.


Chinese electric bicycles, which are thriving in the European market, will be the subject of common interest among China and EU companies as they did 25 years ago. The industry is still thinking about, in the face of non-domestic industries, the trade protection is really conducive to the development of the industry and the common living environment of mankind?


As a signatory to the Paris climate change agreement, both China and the EU are making their own efforts to tackle global climate change. Czech electric bicycle brand dealer Mgr. Jakub Ditrich recalls that earlier, when the European Union imposed anti-dumping duties on bicycles, it said that taxation did not involve electric bicycles because they contributed to reducing greenhouse gas emissions and greening transport. What makes it hard for him to understand is that when the electric bike team is growing in urban traffic, the view is left behind by the European Commission's "apologists".


More to the indignation of Chinese companies, the survey will choose the price of Switzerland as a "replacement country" price. In Xiangcan's view, the criteria for selecting a country are not in conformity with the actual situation, and the act of selecting the "Substitution country" is not in itself consistent with WTO rules.


According to article 15th of the China Accession protocol, in any case, it should be terminated after 15 years after China's accession to the WTO (i.e., December 11, 2016) by quoting the benchmark price of similar products of substitute countries as a definition of dumping.


The "Alternative country pricing law" has also been resolutely opposed by the Chinese Ministry of Commerce.


Economic observer from China electromechanical products import and export Chamber of Commerce related to the Department, the Chamber of Commerce has been on behalf of the Chinese electric bicycle industry has submitted relevant comments. As of the press, 78 Chinese enterprises involved in the investigation have submitted their responses and samples to the European Commission according to the procedures of the survey.


Price controversy


Bicycles with pedal-assisted and auxiliary motors are the products being investigated, including electric bicycle and high-speed electric bicycles originating in China or exported from China. Its EU Customs code is 8711 60 10 and ex 8711 60 90.


There are 3 main types of products involved: Electric City bikes, electric off-road bicycles and electric mountain bikes. All three types of products are equipped with hub motors or middle-mounted motors.


"China currently has no bottleneck in technology, logistics is effective and the industrial chain is more complete." "The price of electric bicycles in China is more reasonable and not deliberately lowered," said Hesin, co-founder of the joint founder of Octagon Electric (Suzhou) Co., on the economic observer.


And according to Mgr. Jakub Ditrich introduced that in Europe, the boom in the industry began only 5 years ago.


Complaints about European prices, Hesin analysts say, that companies like Europe are positioning their prices very high because of costs and technical deficiencies. When Chinese companies think 15%-20% of profits are enough, European monopolies say "50% of the profits are low".


Chen Huiqing, director of the legal Department of the Electromechanical Chamber of Commerce, analyzed the economic observer the prosecution advocates that the increase in unit cost is due to the shift from the hub motor to the middle-position motor, the gradual popularity of mountain electric bicycles, but it is also possible that the prosecution of the market made a wrong advance, put too much cost to produce more expensive mountain electric bicycles, Exceeded the actual demand of the market, which caused the prosecution to be unable to obtain the sufficient profit, thus suffered the damage.


In addition, the survey will choose the price of Switzerland as a "replacement country" price. "Switzerland is not one of the most expensive countries. "In Xiangcan's view, the criteria for selecting a country are not in line with the actual situation, and the selection of the" Substitution Country "act is not in itself in accordance with WTO rules.


According to article 15th of the Protocol on China's accession to the WTO, in any case, it should be terminated after 15 years after China's accession to the WTO (i.e., December 11, 2016), citing the reference price of similar products in alternative countries as the definition of dumping.


The "Alternative Country Pricing Act", adopted by the case, was resolutely opposed by the Chinese Ministry of Commerce. "This behavior is a clear violation of China's international obligations under article 15th of the WTO protocol," the spokesman said at a routine press conference held November 9. "He said he would closely follow the progress of the case, highly concerned about the EU's approach in the investigation and WTO rules, will take the necessary measures to resolutely defend the legitimate interests of Chinese enterprises."


The consequences of anti-dumping of Chinese electric bicycles


"Once this investigation is established, it will be devastating to Chinese electric bicycles," he said. Xiangcan said of the economic observer. "The approval of high import tariffs on electric bicycles will lead to serious shortages of bicycles in the market and an extreme rise in market prices." That, of course, is what European producers, who lobbied to introduce anti-dumping duties, are happy to see. Mgr Jakub Ditrich told the Economic Observer.


Ordinary bicycles have been taxed for 25 years, with the consequence that most ordinary bicycles are now made in Eastern Europe. Ton van den Oetelaar, head of the Dutch brand, sees that China's industry is growing rapidly and should not be turned away, and that "good quality bicycle manufacturers should be allowed to export to Europe".


Prosecutors argue that the imposition of anti-dumping measures will not have a significant negative impact on consumers involved in the EU's products. Many in the industry interviewed by the Economic Observer questioned this. Xiangcan analysis, the result of anti-dumping is likely to be China's entire car into a part of imports, market prices increased, Europe's electric car assembly companies to obtain high profits, and consumer interests will be damaged.


Several European brands also told the Economic observer they feared they would lose some of the market. "Consumers will be hurt by rising prices, which is not conducive to the sustainable development of the industry." Ton van den Oetelaar believes that every ordinary person has the right to own an electric bike and not just a handful of rich people.


In the process, labour-related considerations have also been overlooked. "It's hard to find workers in Europe. All young people want to do marketing. Ton van den Oetelaar told the economic Observer that when only 7% of EU citizens have an average income, the cost of electric bicycles should not be increased.


In Europe, labour and social security do not have an advantage in terms of efficiency. Ton van den Oetelaar argues that the EU cannot ignore the availability and cost of European labour, and the fact that most parts are produced in China. "Outsourcing makes sense to us, and we will focus on marketing, sales, EU regulation, research and development and services." ”


25 years ago, for the self-interest of individual enterprises, the European Union sacrificed the interests of consumers and made the European bicycle industry stand out. Now, do we have to use the same means of trade protection to turn the new product, China's electric bicycle, out of the EU? This is a common concern of domestic electric bicycle enterprises.


As the Ministry of Commerce spokesman Peak on November 9, the regular press conference, China's electric bicycle industry is a fully competitive industry, the European industry in supporting supply chain, technical solutions and other aspects of a wide range of cooperation, can achieve mutual benefit and win. "We hope that the European Union will conduct an impartial and objective investigation and not provide excessive protection at the expense of the environment, the EU's upstream and downstream industries and the interests of consumers," he said. "The peak" said.


European Industry Association and German manufacturer


"It was a deliberate act. "Hesin heard about this kind of investigation in the past year, but he did not say," We have our own patents, our own technology, in line with European laws and regulations. According to him, China's electric bicycles have started in the 95, and Europe has 2000 years of real electric bike design.


The real reason is that China's technology is growing and EU producers are losing market share, a violation of some groups ' interests.


The applicant for this case is the European Association of Bicycle Manufacturers (European Bicycle Manu-factures Association, hereinafter referred to as "EBMA"). The industry group, which represents the European Union's electric bicycle manufacturers in Germany, the Netherlands, Hungary and France, is also an applicant for the traditional EU bicycle anti-dumping survey 25 years ago.


The European Association of Bicycle Manufacturers said on September 8 that it represents more than one-fourth per cent of the EU's output.


Mgr Jakub Ditrich did not know who was behind the lobbying campaign. Mr. fio-ravanti--, the Secretary-General who contacted the EMBA before, was the Secretary-General who proposed an anti-dumping investigation into the European Commission--questioning who was a member and supporter of his association. To his surprise, the other party refused to answer on the basis that the "membership list is not public".


According to the feedback from all sources, Bosch is the most important driver behind the scenes. "Hesin sells electric bicycle drive systems, more than 80% are sold in Europe." Throughout the indictment, the system was compared with Bosch, a German enterprise. "At present, Bosch's central motor system in Europe, especially in Germany, is in absolute monopoly position, if the EU through anti-dumping, Hesin companies (that is, the electric) platoon out of Europe, its monopoly status will be greatly enhanced."


In the final analysis, "electric bicycle is a popular industry of green traffic, the threshold is relatively low, governments are developing their own brands, and do not want to market share away", Hesin said.


The Commission has 9 months to decide whether to impose temporary anti-dumping duties on China, and then finally determine whether to formally levy tariffs for a period of 5 years. As a signatory to the Paris climate change agreement, both China and the EU are making their own efforts to tackle global climate change. Whether the EU will consider the positive contribution of electric bicycles has also become the focus of attention in the industry.


Hesin has booked a flight to Europe. Next, he will lobby the European media PR company and consider suing the relevant party for the monopolistic behavior of Bosch in Germany.

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