Chinese tax ruling may boost Taiwanese firms

A recent Chinese tax reduction on ethanolamine products could help Taiwanese petrochemical exports to China outplay competitors in the Chinese market, a senior official at the Bureau of Foreign Trade (BOFT) under the Ministry of Economic Affairs said yesterday.

China cut an anti-dumping tax imposed on ethanolamine imports from Taiwanese petrochemical producer Oriental Union Chemical Corp (東聯化學) to 5.3 percent from 20 percent, an announcement issued by China's Ministry of Commerce (MOC) said.

Oriental Union Chemical filed an appeal with the MOC in 2006, asking for a reversal of the ministry's imposition of a 20 percent anti-dumping tax on the company. After a year, the Chinese ministry decided the firm showed no trade dumping inclinations and awarded a massive tax reversal.

Describing the ruling as an opportunity, BOFT Deputy Director-General James Wu (吳新華) called for more companies to ask for cuts in anti-dumping tax rates.

From 2004, China has imposed heavy anti-dumping taxes on ethanolamine products imported from foreign countries, such as Japan, the US and Taiwan, with tax rates ranging from 20 percent to 74 percent, to prevent foreign products from monopolizing the market and to boost Chinese petrochemical companies.

Japan's Nippon Shokubai Co was also given a tax reduction on its ethanolamine products, down to 7.3 percent from its previous 74 percent, the same ministry statement said.