Analysis on the Correlation Between Anti-dunmping Duty Rate of China and Price Raw Materials

Abstract: Since the anti-dumping case on Chinese newsprint industry, the anti-dumping duty rate, a crucial decision of government, has always been regarded as a hot issue in the academic field. Based on the study of Chinese investigation on anti-dumping cases, this paper at first establishes an economic model of Chinese anti-dumping duty rate on the static games of complete information. It starts from the single market equilibrium until the model of upstream and downstream enterprises is introduced. Through the Cournot-Nash Equilibrium and backward induction, on the premise that the maximization of social welfare is guaranteed by the government, this paper explains that the optimal anti-dumping duty rate is in direct proportion to the price of raw materials and to the market capacity.Another contribution of this paper in the following parts is to study the anti-dumping cases since the anti-dumping policy is put into execution in China. Through the statistical and metering method, it illustrates the correlation between anti-dumping duty rate and the upstream raw material price, as well as that between anti-dumping duty rate and the average annual growth rate in consumption. In this way, it comes to an elucidation that the variations of raw material price and market demands can be regarded as early warning signals for protectionism policy, which certifies to the theory model above.In the end, via the analysis on the representative anti-dumping cases on other countries, it makes a conclusion and offers reasonable policies and suggestions.
Key words: anti-dumping duty rate; optimal model; the price of raw materials; the growth rate in consumption;