China is launching an investigation into whether potato starch imported from the European Union is being dumped in China.

The aim is to protect domestic enterprises from unfair competition.

China's Ministry of Commerce, the trade watchdog, said in a statement yesterday that it would look into whether dumping existed and if so, the extent of it.

If dumping is confirmed, the ministry will also investigate the damage to domestic industries.

If the case stands up in court, the Chinese Government could impose penalty duties on potato starch imports from the EU.

The investigation will cover imports last year.

The EU exported around 74,800 tons of potato starch to China last year, accounting for 99 per cent of the country's total imports. Trade volume hit US$29.22 million last year.

Seven Chinese starch manufacturers, from Heilongjiang, Qinghai, Gansu and Yunnan provinces and the Inner Mongolia Autonomous Region, filed petitions in December to the commerce ministry against their EU rivals.

They claimed the European players were selling potato starch to China at less than the cost.

Potato starch is widely used in a number of industries such as food processing, pharmaceuticals and textiles.

Investigations into alleged dumping usually take one year to complete but can be extended for another year under special circumstances.

(China Daily February 7, 2006)