China said yesterday it had decided in a final verdict to impose anti-dumping duty on coated art paper imported from South Korea and Japan.

The row was the first anti-dumping case filed by China after it joined the World Trade Organization in December 2001.

Importers of coated art paper from the other two countries will have to pay duty ranging from 4 per cent to 71 per cent.

Duty of 4 per cent to 51 per cent was imposed on South Korean paper makers, while that imposed on Japanese companies ranged from 9 to 71 per cent.

The decision is the final verdict on the anti-dumping measures, said the Ministry of Commerce. A preliminary ruling was made last November.

An investigation by the ministry found that China's art paper industry suffered "substantially'' because of dumping by the other two countries.

Finland and the United States were dropped from the case, and no measures were taken as the ministry found that those two countries contributed less than 3 per cent of the total imports.

Coated art paper is mainly used for colour pictorial publications, advertisements and packaging.

China launched the probe in response to applications submitted on February 6 last year by four local paper manufacturers -- the Gold East Paper Co Ltd, the Jiangnan Paper Mill, the Shandong Quanlin Paper Co Ltd and the Wanhao Paper Group Co Ltd.

The four companies accounted for 65.6 per cent of the country's total output of coated art paper in 2000 and 56.6 per cent in 2001, the two-year investigation period.

Zhao Wei, an official from the China Paper Industry Association, said the successful result stems from rising awareness among local enterprises about how to protect their market share by using WTO rules.

"This investigation has helped the local companies involved to increase their knowledge of the relevant laws and WTO rules,'' Zhao said.

Wu Xingfang, general manager of the Jiangsu-based Gold East Paper Co, said the company, in filing its application, did not aim to close the market to coated art paper manufacturers from the other countries but sought a level playing field.

The ministry investigation found that the prices of coated art paper offered by manufacturers from Japan and South Korea are below average and have seriously affected the operations of Chinese companies, whose annual profits dropped by an average of 559.74 per cent between 1999 and 2001.

The industry as a whole lost 150 million yuan (US$18.1 million) in 2001, Zhao said.

Coated art paper is the highest-grade paper used in the printing industry. China started manufacturing art paper in 1999, having relied on imports before.

Due to the increasingly improved quality of Chinese-made paper, Chinese customers have started to switch from imported art paper to locally made paper.

To regain their market share, producers of imported art paper began to cut the prices of their products on the Chinese market in 2001, triggering a price war.

Zhao said: "Apart from stopping dumping, Chinese enterprises should work harder to improve the quality of their products, update their management methods and increase their efficiency to thrive amid the heated competition.''

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