On October 27, 2017, the U.S. Commerce Department issued its preliminary determination in the antidumping investigation of Aluminum Foil from China. A key aspect of this determination was an analysis of whether China should continue to be treated as a non-market economy in U.S. antidumping investigations. In this regard, Commerce concluded that China remains a non-market economy because:
At its core, the framework of China’s economy is set by the Chinese government and the Chinese Communist Party (CCP), which exercise control directly and indirectly over the allocation of resources through instruments such as government ownership and control of key economic actors and government directives. The stated fundamental objective of the government and the CCP is to uphold the “socialist market economy” in which the Chinese government and the CCP direct and channel economic actors to meet the targets of state planning. The Chinese government does not seek economic outcomes that reflect predominantly market forces outside of a larger institutional framework of government and CCP control.
The right of WTO Members to continue treating China as a non-market economy in antidumping proceedings after December 11, 2016 is currently subject to challenge before the World Trade Organization (“WTO”). Commerce’s 200-page analysis of the Chinese economy is the first time since 2006 that the agency has considered China’s market-economy status under U.S. law. It confirms the United States’ position that WTO rules, even after December 11, 2016, continue to allow Members to treat China as a non-market economy, unless and until China demonstrates otherwise under the law of the individual Member.
A copy of Commerce’s memorandum is available here.