Prsentation of Eco Project

7/29/2019 Prsentation of Eco Project

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MANISHA K. BHANUSHALIROLL NO : 1

MCOM PART I(ACCOUNTS)


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TOPIC OF PROJECTDUMPING


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MEANING OF DUMPING

Dumping is the act of charging a lower price for a good

in a foreign market than one charges for the same good

in a domestic market.


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Dumping Selling exports at a price that is too low, a price below

normal value or fair market value.

Either

The export price is lower than the price charged forcomparable domestic sales in the home market of the exporter.

or

The export price is lower than the full unit cost (including a

profit margin).


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TYPES OF DUMPING

Predatory dumping :temporary, to drive competitors outof business; then firm is a monopoly

Cyclical dumping :when demand is low; price is below ATCbut above AVC

Seasonal dumping :to sell off excess inventories(perishable goods, fashion items, new items)

Persistent dumping :a firm with market power uses pricediscrimination

Firm is a monopoly at home, but a competitive firminternationally

Price discrimination is more profitable


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Objective of Dumping

Occasional :Occasional dumping means disposing occasional overstocks or

remainders at the end of selling season which may be practically unacceptable in the market.

Short run :Short run dumping exists from time to time for a short period of

time .

Long run: On the other hand means selling year in and year out it lower price

this is also called as continuous dumping. Continuous dumping can take place

under condition of competition only when the government or some other body

grants a bounty on exports.


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Actual antidumping policies WTO allows countries to retaliate against dumping if

dumping injures domestic import-competingproducers.

Traditional users US, EU, Canada, Australia

1980s 34 countries with antidumping laws;traditional users accounted for 90% of cases.

2005 95 countries; traditional users accounted forapproximately 1/3 of cases.

Countries against which antidumping laws are applied China, South Korea, EU, US, Taiwan.

Usual products chemicals, steel, metals, machinery,textiles, apparel, electrical products.


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Top Ten Initiators of Anti-Dumping Cases


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Case on Dumping

Chinese goods in India :

Come any occasion and the Indian consumer isready to make a beeline to purchase another of those Chinesegoods. For one, these Chinese goods are substantially cheaper

than Indian goods and come in wide varieties. In very simpleterms in Economics, we know that anything like large scaleDumping and imports can spell a disaster for the economy. Insimple Keynesian terms, it is a Leakage of Income from theEconomy. This article focuses on the background of the Pricing

Policy By China, the damage or not it can cause for the Indiandomestic industry, the anti dumping tariffs Adopted by theIndian government, the latest Statistics and we conclude withsome Policy Suggestions.


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Following are some of the reasons behind Chinese

goods being cheaper than Indian goods.

1. China does not have stringent intellectual property rights (IPR) issues so come any new product in the world

market; China is ready with a cheaper alternate. Thus there is no cost of research, designing and redesigning

of any product.

2. The labor is not demanding and does not go on strike.

3. Where most Indian companies are striving for a Total Process Review (TPR) for quality satisfaction, Chinese

companies are not so particular.

4. China does not have any after sales tax on its products leading to a further lowering of costs.

5. Are we enjoying the cheap Chinese goods because the Chinese currency is undervalued leading to purchase of

cheap Chinese goods? This needs to be carefully studied.

6. The cheap Chinese labor is another major reason for the dirt cheap Chinese goods especially like toys where

intensive labor techniques are employed

7. With the removal of quantitative restrictions (QR), the ending of the textile quota regime and Chinese

accession to WTO, the dumping activity by Chinese has increased manifold.

8. Lower rate of Indirect taxes on Inputs

9. High level of cash subsidies being offered by the Chinese government to its producers and exporters

10. Lower taxes enable the Chinese companies to participate in the world market at a lower margin and thus

dominate it.


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Conclusion

Dumping must be distinguished from simple practices of low-price sales resulting from lower costs or greater productivity. Thekey criterion in this respect is not, in fact, the relationship betweenthe price of the exported product and that on the market of thecountry of import, but the relationship between the price of the

exported product and its normal value. A product is thereforeconsidered to be dumped if its export price to the European Union(EU) is less than the comparable price for a like product establishedin the ordinary course of trade within the exporting country. MarketEconomy status for China and Impact on India- With Chinas entryinto the WTO, there is much talk happening about granting of MES

to China. (MES-When the exporting country is treated at par interms of transparency and prices are known to be decided by theeconomic forces.

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