EU Silent on Bicycle Tax Extension

The EU is refusing to comment on Chinese media reports suggesting an anti-dumping tax on bicycles imported from China is set to be extended.

The EU says cheap bicycles imported from China threaten domestic manufacturers. So it artificially raises their price by imposing what's known as an anti-dumping tax of around 50 percent.

But the move has received criticism from both sides. CRI's Dominic Swire reports.

Trade relations between the EU and China have hit rocky ground again. This time it's about bicycles.

Reports in the Chinese press suggest the EU is set to extend anti-dumping taxes on imported bicycles from China. The tariff is designed to protect European bicycle manufacturers from what some say is unfairly cheap competition. But not all agree.

Fredrik Erixon heads the European Centre for International Political Economy, an economic think-tank based in Brussels.

"It's obvious Europe is acting in a protectionist manner against China when it comes to low-cost manufacturing sectors where Europe is trying to protect itself from much more efficient producers in Asia."

China's Xinhua news agency says it's seen a document that states the current anti-dumping tax of almost 50 percent will be extended for an extra two years until 2016.

Yu Xiang is an economist at China's Institute of Contemporary International Relations. He says Chinese companies won't like the news, but there could be a silver lining.

"Of course such a policy will have a very bad impact on Chinese manufacturing industry. But on the other hand, maybe this policy will be good for some Chinese firms because it will help them improve technologies."

Trade disputes between the EU and China are nothing new. China's complained about EU anti-dumping tariffs on many occasions. At the same time, many European companies say they face unfair competition in China.

Fredrik Erixon from the European Centre for International Political Economy again:

"In the greater scheme of things I don't think this individual example is going to disturb EU-China relations. However, when you aggregate all various forms of negative examples of protectionism by Europe against China and against other countries, of course, that turns into a problem."

For its part the EU has refused to comment on the media speculation, simply stating that a final proposal on the tariffs will be released at the end of August.

For CRI, I'm Dominic Swire.