GUANGZHOU - Household ceramics companies in Guangdong province are preparing to mount a legal response to an anti-dumping investigation initiated by the European Union, industry insiders said.

Many ceramic tableware and kitchenware makers in Chaozhou, in the eastern part of Guangdong, have invited lawyers from Beijing to help them take "active legal" steps in response to the anti-dumping inquiry, which was begun by the European Commission in mid February.

"They will respond to the possible charge following the investigation," said Cai Hao, an official with the Chaozhou Bureau of Foreign Trade and Economic Cooperation.

More than 2,000 Chinese makers of household ceramics might be affected by the latest anti-dumping investigation, which follows similar inquiries that targeted Chinese makers of building ceramics in 2011 and of ceramic tiles in 2010, sources with the China Ceramic Industrial Association said.

The ceramic makers likely to be affected by the investigation are mostly based in Guangdong, which exported nearly $400 million worth of household ceramics to Europe last year, local customs sources said.

Household ceramics now make up nearly 70 percent of Chaozhou's ceramics exports, and about 200 ceramics companies in the city may be affected by the investigation.

"The EU's anti-dumping investigation will greatly affect local household-ceramic businesses because Chaozhou has become one of the chief household-ceramic bases in the country," Cai said.

Foreign trade authorities issued a notice to ceramics producers on Feb 10, encouraging them to respond to the investigation.

Cai said local foreign trade authorities will help ceramics makers take legal action.

In Foshan, another important ceramics manufacturing base in Guangdong, nearly 30 household-ceramics companies are likely to be affected by the investigation.

"Chinese ceramics makers should respond to the anti-dumping investigation with action," said Lan Weibing, director of the industrial association's representative office in Foshan.

"Otherwise, they will lose a big share of the European market."

China makes more household ceramics than any other country and has a nearly 50 percent share of the European market, sources with the association said.

The investigation is the largest of its kind to emerge since Indonesia began a similar inquiry into Chinese ceramic tableware and kitchenware products earlier this year. The Indonesian anti-dumping committee plans to impose a punitive tax rate of up to 87 percent on imported Chinese household ceramics.

Some Chinese ceramics makers, though, plan to look more at the domestic market to avoid the risks entailed by the anti-dumping investigation.

"We will not hire lawyers to help us," said Fu Hui, a production manager at Choosing Porcelain Co Ltd. "We will attach more importance to developing growth points in the domestic market."

The Dongguan-based company, which mainly makes porcelain coffee cups, exported all of its products overseas last year, Fu said.

"Europe has seen a steady reduction in the demand for Chinese household ceramics in recent years," Fu said. "Together with the anti-dumping investigation, we are finding more market channels to maintain business growth."

If the punitive tax rate is adopted, Chinese ceramics companies will have to pass the additional cost onto European customers, Fu said.

China Daily

(China Daily 03/02/2012 page14)