China's polyester staple fiber (PSF) manufacturers have pledged to fight back against the European Commission's preliminary ruling against them on Wednesday.

"The rulings are unfair," said Fu Donghui, lawyer for the Chinese firms, adding that they would appeal the decision.

This is the latest development in the country's largest textile anti-dumping case since entering the WTO in 2001.

The EU will levy duties against all finished polyester filament fabrics originating from China. Over 800 Chinese enterprises were involved in the investigation, and of the 56 that responded to it, 25 were granted market economy status.

They will have to pay duties of 20 percent, whilst another 19 will be charged between 26.7 and 74.8 percent, and the rest 85.3 percent.

"The commission violated WTO rules and EU anti-dumping laws in its method of reaching the preliminary ruling," Fu said.

According to Cao Xinyu, deputy director of the China Chamber of Commerce for the Import & Export of Textiles, the EU based its calculations on production costs in Mexico, where labor costs are 20 times that of China.

The investigation was launched by the European Commission on July 17 at the request of seven European producers.

In January this year alone, the first month after the abolition of global textile and clothing quotas, China's exports of textiles and garments were worth US$3.7 billion, a 13.93 percent increase compared to the same month last year.

Throughout March, domestic producers in the US, EU and elsewhere called on their governments to limit Chinese textile imports.
 
The chamber of commerce said it would start to evaluate the impact on the country's exports to the European market.

It added that it would organize its members to fight for a preferable final determination in September.

The EU accounts for about 20 percent of global textile and clothing imports, and the US for around 24 percent.

The newly declared duties are quite high for Chinese exporters and will block exports to the European market, as products from Indian and Pakistan are also competitive, Fu said.

(China Daily, China.org.cn March 18, 2005)