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The lighter side of Li Zhongjian
By Hao Zhou (China Daily)
Updated: 2009-03-19 16:02
Li Zhongjian is known for two distinct roles. A Deng Xiaoping look-alike, he has played the late Chinese leader in various films. As the CEO of China's largest lighter manufacturer, he became the first Chinese businessman to fight an anti-dumping battle with the European Union (EU). At 50, Li is a member of a generation of Chinese entrepreneurs who have prospered with a more open China, and he attributes his success in making and exporting Tung Fong-brand lighters to the opening and reform designed in the late 1970s by the man he has portrayed on film and on television. Li's Tung Fong Light Industrial Co Ltd produces 2 million lighters a year, supplying more than 90 percent of the metal lighters in China, and 80 percent in the world. Bringing in an annual 100 million yuan in sales, it is the leader of the lighter industry in Wenzhou in east China's Zhejiang province. Wenzhou, one of China's most prosperous cities with some 300,000 private small and medium-sized enterprises (SMEs), is now bearing the brunt of China's export slowdown due to the softening of overseas demand. At its peak, Wenzhou had more than 1,000 lighter companies. "Around 300 lighter manufacturers still survive, but no more than 20 can keep up regular production," Li reported. He has reacted quickly to the changing market. "We can roll out a lighter model within a month after we receive the order," Li said. "We have registered more than 30 patents in the last two years," he said. "I strongly believe there is still a good market for Chinese-made commodities. We will ensure at least a 10 -percent increase in terms of sales revenue for 2009." Li has been selling his exports at half the price of comparable lighters made in Europe and the United States. As a result, his company along with other Wenzhou lighter companies became the target of dumping charges. The EU launched a trade war against Wenzhou's lighter industry shortly after China joined the WTO in 2001. The EU demanded that lighters sold for less than 2 euros be equipped with a security lock for child protection, or they would not be allowed in the EU market. "This technical barrier was directly targeting lighters made in Wenzhou," Li said. The US had passed a consumer protection law requiring all lighters sold in the US be equipped with a device to prevent young children from easily triggering the lighters. "With that kind of device, a lighter will cost more, and we would lose our price advantages," Li explained. "At that time, we knew little about international trade and didn't know we could negotiate with the US," Li added. Thus Wenzhou's lighter manufacturers gave up the US market and shifted to the EU. In June 2002, the EU launched an anti-dumping investigation of Li's company and 16 others. At that point, Li Zhongjian decided to apply for market economy status. "We don't receive State subsidies and are completely exposed to the market," Li said. He began to prepare all the detailed financial statements for the EU special panel's three-day investigation on his company's market economy status. "If we are granted market economy status, then the EU can examine our production costs based on our own financial statements to determine whether we are dumping lighters in the EU." Li explained. "Otherwise, they would compare our production costs to that of market economies and that would put us at a distinct disadvantage." (For more biz stories, please visit Industries)
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