Antidumping under International Fragmentation: Evidence from China

• DOI: http://doi.org/10.1111/rode.12220
• Date: 01 February 2016
• Author: Jun Deng,Yi Liu
• Published date: 01 February 2016

Antidumping under International Fragmentation:

Evidence from China

Yi Liu and Jun Deng*

Abstract

Applying a negative binomial regression model, this paper investigates how Chinese exports have

reshaped the global value chain and the use of antidumping. We use trade in value-added statistics to

distinguish between Chinese exports of intermediate and final products to its main trading partners,

including the USA, Mexico, South Korea, the UK, Germany, France and Italy, among others, and find

that other countries welcome China as an intermediate producer, although not necessarily as a final good

producer. We also find that a higher level of fragmentation reduces the likelihood of antidumping

initiation and measures.

1. Introduction

The fragmentation of the production process has reshaped how we do business,

fundamentally affecting trade protection and international cooperation. In

particular, international trade has evolved from inter/intra-industry trade to

intermediate-oriented intra-product trade. The manufacturing of a single product

nowadays involves many countries in the global production network. As such, trade

of intermediates is crucial to a country’s competitiveness. Imported intermediates

greatly increase the productivity of a country (Amiti and Konings, 2007; Iacovone

et al., 2013). Antidumping filings taken against the import of intermediates impede

the efficient functioning of the international production network, thus injuring the

interests of related parties in the antidumping (AD)-filing country.

Many cases show multinational companies (MNCs) often oppose AD measures

taken against intermediate imports. Isakson (2008) described how relatively small-

sized Italian shoemakers selling mainly domestically, who even support increased

import tariffs, heavily supported AD measures against Chinese-made shoes.

However, such AD measures against China were strongly opposed by globalized

EU multinational shoemakers like Danish, Diesel, Adidas, Hush Puppies and Puma

because the imported shoes or shoe parts from China are exported to countries

outside of the EU after branding and labeling. In another case, UK bicycle makers

opposed EU trade restrictions on bikes and bike parts from Vietnam because

MNCs such as Raleigh and Saracen produce some of their parts in Vietnam.

Obviously, this phenomenon is the direct result of international production

fragmentation.

*Liu: School of International Trade and Economics, Jiangxi University of Finance and Economics, East

Shuanggang Road 169, Nanchang City, 330013, China. Tel: +86-791-381-6581; E-mail:

louisones@yahoo.com. Deng: School of International Trade and Economics, Jiangxi University of

Finance and Economics, Nanchang City, China. Tel: +86-373-294-7069; E-mail: printonly@163.com. We

thank Yun S. Fu, Gu Z. Zhou and anonymous referees for very helpful comments. We appreciate Yan L.

Wang for excellent assistance, and the support from National Social Science Foundation of China (under

grant No.13CJL033, “International Fragmentation and its Impact on Chinese Labor Markets”).

Review of Development Economics, 20(1), 306–316, 2016

DOI:10.1111/rode.12220

©2016 John Wiley & Sons Ltd