The World Trade Organization rules permit investigatory authorities to initiate a safeguard investigation upon the application of a domestic industry if an increase in the import volume of a product causes or threatens to cause substantial damage to the domestic industry.
The safeguard investigation into imported beef that the Chinese Commerce Ministry launched under the WTO rules on Friday is in response to an application submitted by the China Animal Agriculture Association and nine industry associations from major beef-producing regions of the country on behalf of the domestic beef industry, the ministry said in a statement.
The applicants for the probe claim that the volume of beef imports has risen sharply over the last five years, growing 106.28 percent in the first half of 2024 compared to the same period in 2019, saying that the sharp increase in beef imports in recent years "has had a significant adverse impact on the domestic industry", the ministry said in a statement.
The large amount of imported beef is undoubtedly "adding insult to injury" pushing down the price of beef products in the Chinese market to the lowest in years and leaving about 65 percent of domestic cattle breeders suffering from long-term losses, the China Animal Agriculture Association said in a statement.
The applicants assert that the sharp increase in imports has significantly impacted China's domestic industry, which has experienced substantial damage, and a causal relationship exists between the damage and the rise in imports. The purpose of the investigation is therefore to verify the authenticity of the claim and then decide what measures to take, if necessary.
The probe, which does not target any specific countries or regions or differentiate products based on origin, will examine bovine meat imported from Jan 1, 2019, to June 30, 2024. It is expected to conclude within eight months, although it may be extended under special circumstances.
Relevant countries' beef trade with China will not be affected during the investigation period, and the investigatory authorities will conduct their work in accordance with the law and make an objective and impartial ruling based on the results of their investigation. To that end, China is willing to maintain communication with all parties, engage in friendly consultations, address mutual concerns, and work collaboratively to safeguard the healthy, stable international trade in beef products.
As a senior analyst of the beef industry of the Chinese Ministry of Agriculture and Rural Affairs, Zhu Cong, pointed out, China has always been relatively open to beef imports, as long as they meet relevant standards, except for some epidemic restrictions. However, in the past two years, because some countries have relatively low breeding costs and provide some subsidies to their industry, the gap with domestic prices is relatively large, Zhu told the media in a recent interview on the investigation.
This has had a significant impact on the domestic market, so the current investigation is a "reasonable" trade relief measure, he noted.
According to data released by the WTO, 55 members of the world trade body have launched safeguard investigations since 1995, resulting in 437 cases, covering 18 major categories of products including agricultural and nonagricultural products. China has so far only launched two safeguard investigations, one into steel imports and one into imports of sugar.
Because beef production has a time cycle, the probe will necessarily have the effect of stabilizing expectations for the domestic beef industry in the coming months, while leaving relevant parties enough time to adjust their operation. China's domestic beef supply is in a period of temporary oversupply, and the next one to two years will be an important adjustment period for the domestic beef industry.
As some experts urged, during that period of time, the Chinese government should substantially increase its policy support in land, husbandry science and technology, and other assistance to help domestic cattle breeders enlarge their business scale, which is crucial to lowering the overall production costs.
Domestic breeders and beef industry practitioners should take that as an opportunity to further improve their management, upgrade their technology and strengthen international cooperation to lower their production costs so as to further enhance their competitiveness in the world market.
