Commission Implementing Regulation (EU) 2023/934 of 11 May 2023 imposing a definitive anti-dumping duty on imports of high tenacity yarns of polyesters originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) and a partial interim review pursuant to Article 11(3) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

12.5.2023	EN	Official Journal of the European Union	L 127/1

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union ¹, and in particular Article 11(2) and Article 11(3) thereof,

Whereas:

1. PROCEDURE

1.1.   Previous and ongoing investigations, and measures in force

• (1) Anti-dumping measures on imports of high tenacity yarns of polyesters (‘HTYP’) originating in the People’s Republic of China (‘China’ or ‘country concerned’) were originally imposed by Regulation (EU) No 1105/2010 ² (‘the original measures’)

• (2) The original measures imposed took the form of an ad valorem duty and ranged from 5,1 % to 9,8 %.

• (3) The original measures applied to all imports of HTYP originating in China, with the exception of imports of HTYP produced by the Chinese exporting producers Zhejiang Hailide New Material Co. Ltd. (‘Hailide’) and Hangzhou Huachun Chemical Fiber Co. Ltd. (‘Huachun’). No duty was imposed on these companies (Regulation (EU) No 1105/2010), as no dumping was found.

• (4) Following the first expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union ³ (the ‘basic Regulation’), the Commission, by Commission Implementing Regulation (EU) 2017/325 ⁴, as amended notably by Commission Implementing Regulation (EU) 2017/1159 ⁵ maintained the original measures. In line with the WTO Appellate Body report in case Mexico – Definitive Anti-dumping Measures on Beef and Rice ⁶ (‘the WTO Appellate Body report’), Hailide and Huachun were not examined in the said expiry review.

• (5) On 30 June 2022, the Commission also initiated an investigation under Article 5 of the basic Regulation with regard to imports of HTYP manufactured and exported to the Union by Hailide (‘the parallel Article 5 investigation’) ⁷. Imports from Hailide are not subject to the present expiry review and interim review investigations. Huachun, the other exporting producer which also received no duty in the investigation that led to the imposition of the original anti-dumping measures, ceased to exist in 2021. Therefore, Huachun is no longer considered an exporting producer of HTYP.

1.2.   Request for an expiry review and for a partial interim review

• (6) Following the publication of a Notice of impending expiry ⁸ of the anti-dumping measures in force on the imports of high tenacity yarns of polyesters originating in China, a request for a review pursuant to Article 11(2) of the basic Regulation was submitted to the Commission on 24 November 2021 (hereinafter referred to as the ‘expiry review’).

• (7) In addition, a request for a partial interim review pursuant to Article 11(3) of the basic Regulation was lodged on 1 April 2022 (hereinafter referred to as the ‘partial interim review’). The scope of the request was limited to dumping. Thus, the injury analysis in this regulation relates exclusively to the expiry review.

• (8) Both requests were lodged by the CIRFS – European Manmade Fibres Association (‘CIRFS’ or ‘the applicant’) on behalf of the Union industry of high tenacity yarn of polyesters in the sense of Article 5(4) of the basic Regulation.

• (9) The expiry review request was based on the grounds that the expiry of the measures would be likely to result in continuation of dumping and continuation of injury to the Union industry.

• (10) The partial interim review request was based on sufficient evidence provided by the applicant that, as far as dumping is concerned, the circumstances on the basis of which the existing measures were imposed have changed and that these changes are of a lasting nature.

1.3.   Initiation of an expiry review and partial interim review

• (11) Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review pursuant to Article 11(2) and an interim review pursuant to Article 11(3) of the basic Regulation, the Commission published notices of initiation of these reviews in the Official Journal of the European Union ⁹ on 23 February 2022 and 30 June 2022 respectively.

• (12) A user association commented on the initiation of both procedures, emphasising the importance of supply stability for the users. Further it claimed that European producers have increased their HTYP exports to China and cannot at the same time claim to be damaged by Chinese imports. The user association further claims that the damage to the European producers has not been proven. The Commission has analysed all claims regarding the Union interest in section 3.10 below. The general claim that the injury of the Union industry has not been proven in the review request, was not substantiated and therefore rejected.

• (13) The Commission decided to conclude on the two separate investigations in the present legal act, setting out (in order in which the investigations were initiated) first the assessment in the expiry review investigation, followed by the findings from the partial interim review investigation.

1.4.   Review investigation period and period considered in the expiry review and partial interim review investigations

• (14) The examination of dumping and the likelihood of continuation or recurrence of dumping and injury covered the period from 1 January 2021 to 31 December 2021 (the ‘review investigation period’ or ‘RIP’).

• (15) The examination of the trends relevant for the assessment of the likelihood of continuation or recurrence of injury covered the period from 1 January 2018 to the end of the review investigation period (‘the period considered’).

2. PRODUCT UNDER REVIEW, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under review in the expiry review and the partial interim review

• (16) The product subject to the reviews is high tenacity yarn of polyesters not put up for retail sale, including monofilament of less than 67 decitex, (excluding sewing thread and ‘Z’-twisted multiple (folded) or cabled yarn, intended for the production of sewing thread, ready for dyeing and for receiving a finishing treatment, loosely wound on a plastic perforated tube), currently falling under CN Code ex 5402 20 00 (TARIC code 5402200010) (‘the product under review’). The CN and TARIC codes are given for information only without prejudice to a subsequent change in the tariff classification.

• (17) HTYP are used in a number of diverse applications such as tyre reinforcement, broad fabrics, seatbelts, airbags, ropes, nets and a number of industrial applications.

2.2.   Product concerned

• (18) Product concerned by the expiry review and partial interim review investigations is the product under review originating in China.

2.3.   Like product

• (19) The investigations showed that the following products have the same basic physical, chemical and technical characteristics as well as the same basic uses:

• — the product concerned;

• — the product under review produced and sold on the domestic market of China and

• — the product under review produced and sold in the Union by the Union industry.

• (20) These products are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.

3. EXPIRY REVIEW INVESTIGATION

3.1.   Interested parties and sampling

• (21) In the Notice of Initiation of the expiry review investigation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the applicant, known Union producers, producers in China, importers and users in the Union known to be concerned, and the Chinese authorities of the initiation of the expiry review investigation and invited them to participate in the investigation.

• (22) All interested parties had the opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

• (23) In the Notice of Initiation, the Commission stated that it might sample interested parties, in accordance with Article 17 of the basic Regulation.

3.1.1.   Sampling of Union producers

• (24) In the Notice of Initiation of the expiry review investigation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample based on production and sales volumes, taking into account their geographical location. This sample consisted of 3 Union producers. The sampled Union producers accounted for more than 50 % of the estimated total EU production and EU sales volume of the like product. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample. No interested party submitted comments on the provisional sample, which was confirmed as the definitive sample. The sample is representative of the Union industry.

3.1.2.   Sampling of exporting producers and unrelated importers

• (25) In order to enable the Commission to decide whether sampling would be necessary in respect of the exporting producers in China and of the unrelated importers in the Union, those parties were requested to make themselves known and to provide the Commission with the information requested in the Notice of Initiation. In addition, the Commission requested the Mission of China to the Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation. No exporting producer came forward. One unrelated importer came forward as an interested party, but did not provide the requested sampling information. Therefore, sampling was not necessary neither for the exporting producers nor the unrelated importers. Since there was no cooperation from the Chinese producers, the findings with regard to the imports from China in relation to the expiry review were made on the basis of the facts available pursuant to Article 18 of the basic Regulation.

3.2.   Questionnaire replies and verification visits

• (26) The Commission sent a questionnaire concerning the existence of significant distortions in China within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of China (‘GOC’).

• (27) The Commission sent questionnaires to the sampled Union producers and to the users. The same questionnaires had also been made available online on the day of initiation.

• (28) The Commission received questionnaire replies from the three sampled Union producers and 2 users.

• (29) Verification visits were carried out at the premises of the following companies for the purposes of the expiry review investigation:

Union producers

• — Glanzstoff Longlaville, Longlaville, France

• — PHP Fibers GmbH, Obernburg, Germany

• — Brilen Tech S.A., Zaragoza, Spain

Users

• — Industrias Ponsa S.A., Manresa, Barcelona, Spain

• — AMOHR Technische Textilien GmbH, Wuppertal, Germany

3.3.   Subsequent procedure

• (30) On 20 February 2023, the Commission disclosed the essential facts and considerations on the basis of which it intended to maintain the anti-dumping duties in force. All parties were granted a period within which they could make comments on the disclosure.

• (31) The comments made by interested parties were considered by the Commission and taken into account, where appropriate. The parties who so requested were granted a hearing.

3.4.   Dumping

3.4.1.   Preliminary remarks

• (32) As mentioned in recital (25), none of the exporters/producers cooperated in the expiry review investigation. Therefore, the Commission informed the GOC that due to the absence of cooperation, the Commission might apply Article 18 of the basic Regulation concerning the findings with regard to China.

• (33) Consequently, in accordance with Article 18 of the basic Regulation, the findings in relation to the likelihood of continuation or recurrence of dumping were based on facts available.

3.4.2.   Procedure for the determination of the normal value under Article 2(6a) of the basic Regulation

• (34) The evidence available at the initiation of the expiry review investigation pointed to the existence of significant distortions in China within the meaning of Article 2(6a), point (b) of the basic Regulation. The Commission therefore considered it appropriate to initiate the investigation having regard to Article 2(6a) of the basic Regulation.

• (35) To collect the necessary data for a possible application of Article 2(6a) of the basic Regulation, the Commission invited all exporting producers in the country concerned to provide information regarding the inputs used for producing HTYP. No relevant information was provided in the context of the expiry review investigation.

• (36) In addition, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the respective Notice of Initiation in the Official Journal of the European Union.

• (37) In point 5.3.2 of the Notice of Initiation the Commission informed interested parties that based on the information available at that stage possible appropriate representative countries pursuant to Article 2(6a)(a) of the basic Regulation was Türkiye.

• (38) The Commission also stated that it would examine other possibly appropriate representative countries in accordance with the criteria set out in 2(6a)(a) first indent of the basic Regulation.

• (39) On 19 July 2022, the Commission issued a First note on the sources for the determination of the normal value (the ‘First Note’) by which it informed interested parties on the relevant sources it intended to use for the determination of the normal value.

• (40) In the First Note, the Commission provided a preliminary list of all known factors of production (‘FOP’) such as raw materials, labour and energy, used in the production of HTYP. In addition, the Commission identified Türkiye, Brazil and Thailand as possible appropriate representative countries. The Commission gave all interested parties opportunity to comment. The Commission received comments from the applicant in support of Türkiye as the representative country.

• (41) After having analysed the comments and information received, the Commission concluded that Türkiye was an appropriate representative country from which undistorted prices and costs would be sourced for the determination of the normal value. The underlying reasons for that choice are further described in detail in Section 3.4.4.2 below.

3.4.3.   Application of Article 18 of the basic Regulation

• (42) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. No questionnaire reply was received from the GOC. Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in China.

3.4.4.   Normal value

• (43) According to Article 2(1) of the basic Regulation, “the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country”.

• (44) However, according to Article 2(6a)(a) of the basic Regulation, “in case it is determined […] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks”, and “shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits” (“administrative, selling and general costs” is refereed hereinafter as ‘SG&A’).

• (45) As further explained below, the Commission concluded that, based on the evidence available and given the lack of cooperation of the GOC, the application of Article 2(6a) of the basic Regulation was appropriate.

3.4.4.1.   Existence of significant distortions

3.4.4.1.1.   Introduction

• (46) Article 2(6a)(b) of the basic Regulation stipulates that ‘significant distortions are those distortions which occur when reported prices or costs, including the costs of raw materials and energy, are not the result of free market forces as they are affected by substantial government intervention. In assessing the existence of significant distortions regard shall be had, inter alia, to the potential impact of one or more of the following elements:

• — the market in question being served to a significant extent by enterprises which operate under the ownership, control or policy supervision or guidance of the authorities of the exporting country;

• — state presence in firms allowing the state to interfere with respect to prices or costs;

• — public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces;

• — the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws;

• — wage costs being distorted;

• — access to finance granted by institutions which implement public policy objectives or otherwise not acting independently of the state’.

• (47) As the list in Article 2(6a)(b) of the basic Regulation is non-cumulative, not all the elements need to be given regard to for a finding of significant distortions. Moreover, the same factual circumstances may be used to demonstrate the existence of one or more of the elements of the list. However, any conclusion on significant distortions within the meaning of Article 2(6a)(a) must be made on the basis of all the evidence at hand. The overall assessment on the existence of distortions may also take into account the general context and situation in the exporting country, in particular where the fundamental elements of the exporting country’s economic and administrative set-up provides the government with substantial powers to intervene in the economy in such a way that prices and costs are not the result of the free development of market forces.

• (48) Article 2(6a)(c) of the basic Regulation provides that ‘[w]here the Commission has well-founded indications of the possible existence of significant distortions as referred to in point (b) in a certain country or a certain sector in that country, and where appropriate for the effective application of this Regulation, the Commission shall produce, make public and regularly update a report describing the market circumstances referred to in point (b) in that country or sector’.

• (49) Pursuant to this provision, the Commission has issued a country report concerning China (hereinafter ‘the Report’) ¹⁰, showing the existence of substantial government intervention at many levels of the economy, including specific distortions in many key factors of production (such as land, energy, capital, raw materials and labour) as well as in specific sectors (such as steel and chemicals). Interested parties were invited to rebut, comment or supplement the evidence contained in the investigation file at the time of initiation. The Report was placed in the investigation file at the initiation stage.

• (50) More specifically, the interim review request alleged that the factors of production, including the main raw materials and energy to produce HTYP are heavily distorted. The request referred to the Report and the distortions identified therein with respect to the chemical sector, including the monoethylene glycol (‘MEG’) and purified terephthalic acid (‘PTA’) industry. Moreover, the request pointed – with reference to the Report – to existing distortions with respect to energy costs. The request also observed that Chinese authorities support implementing preferential fiscal and financial policies for the chemical industry, not least in line with the Chemical Fiber Industry 13th Five-Year Directive Opinion. The request further noted the State interference with respect to the labour market and the land-use rights.

• (51) As indicated in recital (42), the GOC did not comment or provide evidence supporting or contradicting the existing evidence on the case file, including the Report and the additional evidence provided by the applicant, on the existence of significant distortions and/or on the appropriateness of the application of Article 2(6a) of the basic Regulation in the case at hand.

• (52) The Commission examined whether it was appropriate or not to use domestic prices and costs in China, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the Report, which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in China’s economy in general, but also the specific market situation in the relevant sector including the product under review. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in China.

3.4.4.1.2.   Significant distortions affecting the domestic prices and costs in China

• (53) The Chinese economic system is based on the concept of a ‘socialist market economy’. That concept is enshrined in the Chinese Constitution and determines the economic governance of China. The core principle is the ‘socialist public ownership of the means of production, namely, ownership by the whole people and collective ownership by the working people’. The State-owned economy is the ‘leading force of the national economy’ and the State has the mandate ‘to ensure its consolidation and growth’ ¹¹. Consequently, the overall setup of the Chinese economy not only allows for substantial government interventions into the economy, but such interventions are expressly mandated. The notion of supremacy of public ownership over the private one permeates the entire legal system and is emphasized as a general principle in all central pieces of legislation. The Chinese property law is a prime example: it refers to the primary stage of socialism and entrusts the State with upholding the basic economic system under which the public ownership plays a dominant role. Other forms of ownership are tolerated, with the law permitting them to develop side by side with the State ownership ¹².

• (54) In addition, under Chinese law, the socialist market economy is developed under the leadership of the Chinese Communist Party (‘CCP’). The structures of the Chinese State and of the CCP are intertwined at every level (legal, institutional, personal), forming a superstructure in which the roles of CCP and the State are indistinguishable. Following an amendment of the Chinese Constitution in March 2018, the leading role of the CCP was given an even greater prominence by being reaffirmed in the text of Article 1 of the Constitution. Following the already existing first sentence of the provision: ‘[t]he socialist system is the basic system of the People’s Republic of China’ a new second sentence was inserted which reads: ‘[t]he defining feature of socialism with Chinese characteristics is the leadership of the Communist Party of China.’ ¹³ This illustrates the unquestioned and ever growing control of the CCP over the economic system of China. This leadership and control is inherent to the Chinese system and goes well beyond the situation customary in other countries where the governments exercise general macroeconomic control within the boundaries of which free market forces are at play.

• (55) The Chinese State engages in an interventionist economic policy in pursuance of goals, which coincide with the political agenda set by the CCP rather than reflecting the prevailing economic conditions in a free market ¹⁴. The interventionist economic tools deployed by the Chinese authorities are manifold, including the system of industrial planning, the financial system, as well as the level of the regulatory environment.

• (56) First, on the level of overall administrative control, the direction of the Chinese economy is governed by a complex system of industrial planning which affects all economic activities within the country. The totality of these plans covers a comprehensive and complex matrix of sectors and crosscutting policies and is present on all levels of government. Plans at provincial level are detailed while national plans set broader targets. Plans also specify the means in order to support the relevant industries/sectors as well as the timeframes in which the objectives need to be achieved. Some plans still contain explicit output targets. Under the plans, individual industrial sectors and/or projects are being singled out as (positive or negative) priorities in line with the government priorities and specific development goals are attributed to them (industrial upgrade, international expansion etc.). The economic operators, private and State-owned alike, must effectively adjust their business activities according to the realities imposed by the planning system. This is not only because of the binding nature of the plans but also because the relevant Chinese authorities at all levels of government adhere to the system of plans and use their vested powers accordingly, thereby inducing the economic operators to comply with the priorities set out in the plans (see also section 3.4.4.1.5 below) ¹⁵.

• (57) Second, on the level of allocation of financial resources, the financial system of China is dominated by the State-owned commercial banks. Those banks, when setting up and implementing their lending policy need to align themselves with the government’s industrial policy objectives rather than primarily assessing the economic merits of a given project (see also section 3.4.4.1.8 below) ¹⁶. The same applies to the other components of the Chinese financial system, such as the stock markets, bond markets, private equity markets etc. Also these parts of the financial sector other than the banking sector are institutionally and operationally set up in a manner not geared towards maximizing the efficient functioning of the financial markets but towards ensuring control and allowing intervention by the State and the CCP ¹⁷.

• (58) Third, on the level of regulatory environment, the interventions by the State into the economy take a number of forms. For instance, the public procurement rules are regularly used in pursuit of policy goals other than economic efficiency, thereby undermining market-based principles in the area. The applicable legislation specifically provides that public procurement shall be conducted in order to facilitate the achievement of goals designed by State policies. However, the nature of these goals remains undefined, thereby leaving broad margin of appreciation to the decision-making bodies ¹⁸. Similarly, in the area of investment, the GOC maintains significant control and influence over destination and magnitude of both State and private investment. Investment screening as well as various incentives, restrictions, and prohibitions related to investment are used by authorities as an important tool for supporting industrial policy goals, such as maintaining State control over key sectors or bolstering domestic industry ¹⁹.

• (59) In sum, the Chinese economic model is based on certain basic axioms, which provide for and encourage manifold government interventions. Such substantial government interventions are at odds with the free play of market forces, resulting in distorting the effective allocation of resources in line with market principles ²⁰.

3.4.4.1.3.   Significant distortions according to Article 2(6a)(b), first indent of the basic Regulation: the market in question being served to a significant extent by enterprises which operate under the ownership, control or policy supervision or guidance of the authorities of the exporting country

• (60) In China, enterprises operating under the ownership, control and/or policy supervision or guidance by the State represent an essential part of the economy.

• (61) While in the HTYP sector, the degree of state ownership does not appear to be significant, the GOC maintains shareholding in a number of producers, such as a stake of more than 12 % in the Unifull Group. ²¹ Moreover, the companies pledge to cooperate with government authorities in expectation of advancing their business prospects, as can be seen for instance from the 2021 annual report of Zhejiang Unifull Industrial Fibre, ²² according to which: “The company will continue to strengthen cooperation and exchanges with external stakeholders such as local governments at all levels, external financial institutions, customers and suppliers to achieve a win-win situation for the interests of external stakeholders and shareholders.” In addition, given that CCP interventions into operational decision making have become the norm also in private companies ²³, with CCP claiming leadership over virtually every aspect of the country’s economy, the influence of the State by means of CCP structures within companies effectively results in economic operators being under control and policy supervision of the government, given how far the State and Party structures have grown together in China.

• (62) This is apparent also at the level of the China Chemical Fiber Association (‘CCFA’) ²⁴, the sectoral industry association, of which for example Guxiandao is a member, with Guxiandao’s general manager serving as the association’s Vice President. According to Art. 2 of CCFA’s Articles of Association, the organisation’s purpose is, among others, to “implement the country’s industrial policy”. Article 3 confirms CCFA’s subordination to the CCP by stipulating that “[t]he Association adheres to the overall leadership of the Communist Party of China, establishes organizations of the Communist Party of China, develops party activities, and provides the conditions necessary for the activities of the party organizations in accordance with the provisions of the Constitution of the Communist Party of China.”

• (63) Consequently, even privately owned producers in the HTYP sector are prevented from operating under market conditions. Indeed, both public and privately owned enterprises in the sector are subject to policy supervision and guidance as also set out in section 3.4.4.1.5 below.

3.4.4.1.4.   Significant distortions according to Article 2(6a)(b), second indent of the basic Regulation: State presence in firms allowing the state to interfere with respect to prices or costs

• (64) Apart from exercising control over the economy by means of ownership of State-owned enterprises (‘SOEs’) and other tools, the GOC is in position to interfere with prices and costs through State presence in firms. While the right to appoint and to remove key management personnel in SOEs by the relevant State authorities, as provided for in the Chinese legislation, can be considered to reflect the corresponding ownership rights, ²⁵ CCP cells in enterprises, State-owned and private alike, represent another important channel through which the State can interfere with business decisions. According to China’s company law, a CCP organisation is to be established in every company (with at least three CCP members as specified in the CCP Constitution ²⁶) and the company shall provide the necessary conditions for the activities of the party organisation. In the past, this requirement appears not to have always been followed or strictly enforced. However, since at least 2016 the CCP has been reinforcing its claims to control business decisions in companies as a matter of political principle ²⁷, including exercising pressure on private companies to put ‘patriotism’ first and to follow party discipline ²⁸. In 2017, it was reported that party cells existed in 70 % of some 1,86 million privately owned companies, with growing pressure for the CCP organisations to have a final say over the business decisions within their respective companies ²⁹. These rules are of general application throughout the Chinese economy, across all sectors, including to the producers of HTYP and the suppliers of their inputs.

• (65) In addition, on 15 September 2020 a document titled General Office of CCP Central Committee’s Guidelines on stepping up the United Front work in the private sector for the new era (‘the Guidelines’) ³⁰ was released, which further expanded the role of the party committees in private enterprises. Section II.4 of the Guidelines state: “[w]e must raise the Party’s overall capacity to lead private-sector United Front work and effectively step up the work in this area”; and section III.6 states: “[w]e must further step up Party building in private enterprises and enable the Party cells to play their role effectively as a fortress and enable Party members to play their parts as vanguards and pioneers.” The Guidelines thus emphasise and seek to increase the role of the CCP in companies and other private sector entities ³¹.

• (66) The investigation has confirmed that overlaps between managerial positions and CCP membership/Party functions are commonplace in the chemical fibers sector. For example, the general manager of Unifull holds in parallel the position of the Party branch secretary ³² while in Guxiandao, the executive director serves also as secretary of the Party committee. ³³

• (67) The State’s presence and intervention in the financial markets (see also section 3.4.4.1.8 below) as well as in the provision of raw materials and inputs further have an additional distorting effect on the market ³⁴. Thus, the State presence in firms, in the HTYP and other sectors (such as the financial and input sectors) allow the GOC to interfere with respect to prices and costs.

3.4.4.1.5.   Significant distortions according to Article 2(6a)(b), third indent of the basic Regulation: public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces

• (68) The direction of the Chinese economy is, to a significant degree, determined by an elaborate system of planning which sets out priorities and prescribes the goals the central and local governments must focus on. Relevant plans exist on all levels of government and cover virtually all economic sectors. The objectives set by the planning instruments are of binding nature and the authorities at each administrative level monitor the implementation of the plans by the corresponding lower level of government. Overall, the system of planning in China results in resources being driven to sectors designated as strategic or otherwise politically important by the government, rather than being allocated in line with market forces ³⁵.

• (69) The chemical fiber industry is regarded as a key industry by the GOC. This is evident from the 2022 Guiding Opinions on the High-quality Development of Chemical Fiber Industry (‘the Guiding Opinions’) issued by Ministry of Industry and Information Technology National Development and Reform Commission ³⁶, according to which “The chemical fiber industry is an essential pillar of the stable development and continuous innovation of the textile industry chain, an internationally competitive advantage industry, and an important part of the new material industry”. Article I.2. of the Guiding Opinions explicitly articulates the GOC’s intention to determine the geographical and corporate structure of the sector, as well as essential production parameters. ³⁷ The Government intervention may take the form of production sites relocations (“implement the regional development strategy, under the premise of complying with industry, energy, environmental protection and other policies, encourage leading enterprises to build integrated bases for the whole industry chain of chemical fiber textile in Guangxi, Guizhou, Xinjiang and other central and western regions, and form efficient and collaborative supply chain systems with neighbouring countries and regions”), mergers aimed at creating industrial champions (“encourage enterprises to optimize the allocation of production factors through mergers and reorganization, and accelerate business process reengineering and technological upgrading. Support leading enterprises to gather high-quality resources such as technology, brands, channels and talents”), designation of companies as eligible for special support through dedicated Government programs (“promote the integration and development of large, medium and small enterprises, cultivate specialized and specific new "little giant" enterprises and single champion enterprises”) etc. ³⁸

• (70) This central Government’s strategy is confirmed in numerous planning documents focused on the chemical fiber industry issued at provincial and municipal level.

• (71) The Zhejiang, Jiangsu, Fujian and Shandong provinces, as well as the Chongqing municipality provide good examples.

• (72) The Jiangsu 14^th Five year Plan on the high-end development of chemical industry ³⁹ not only contains detailed provisions on development goals for a wide range of subsectors within the chemical sector ⁴⁰ but it also mirrors the above-mentioned policies of the Guiding Opinions on the industrial structure:

Through the consolidation of resources, accelerate the construction of a number of large enterprises and enterprise groups with leading roles, increase the level industry concentration, and form a number of world-class enterprises and "single champion" enterprises. ⁴¹ […]

The layout of the chemical industry in the province abides by the requirements of the national and provincial industrial planning and layout plans, with chemical parks as important development carriers, they are also essential to lead the development of the chemical industry in each district and city. The industrial development orientation abides by the requirements of the relevant industry policies of the state and of Jiangsu province, establishes the development concept led by encouraged industries, and implements the upgrading of traditional chemical industries as well as the coordinated development of industries in new fields. ⁴²

as well as the geographic distribution of production:

The overall layout plan is based on the whole province, according to the characteristics of each city’s industry development, highlighting the advantages of industry development, further improving the development level of characteristic industries, and expanding the industries that meet regional development needs taking into account each city’s relevant industries and local market conditions, ensuring the differentiated development of the chemical industry in each city of the province, and forming a comprehensive industry system with each city having complementary advantages ⁴³.

• (73) Similarly, the Special plan for the development of strategic emerging industries in the Fujian Province during the 14th FYP ⁴⁴contains a mandate for the provincial authorities to support the chemical fibers sector and guide its development:

Accelerate the development of new textile fabrics, and increase the research and development of functional differentiated fibers, high-performance fiber blends, high-count and high-quality yarns and their fabrics, new heat-bonding composite fibers (ES fibers) for sanitary use, and high-performance metal fibers. ⁴⁵ […]

Support the construction of Fuzhou’s new functional materials industry clusters (membrane materials, advanced textiles, high-performance metal materials, high-performance composite materials, etc.), Xiamen new functional materials industry clusters […], Putian’s new functional materials industry cluster (new chemical fibers and functional textile materials, etc.) and Xiamen biomedical industry cluster […].

• (74) The interference of Fujian’s authorities with the development of the chemical fibers’ sector is further apparent from the provincial 14^th FYP on developing a high quality manufacturing industry which gives the following instruction to the stakeholders:

Promote the construction of Baihong polyester industrial yarn project, and develop special chemical fiber materials used in the automotive sector, marine engineering, military equipment, medical health and other fields. Accelerate the research on cutting-edge fiber technology, focus on breakthroughs in key fiber technologies such as nano-, intelligent, and biomedical fibers, and strive to achieve breakthroughs in high-end fibers such as carbon fiber, aramid fiber, polyphenylene sulfide, and ultra-high molecular weight polyethylene. ⁴⁶

• (75) Also Shandong’s 14^th FYP on developing the chemical industry ⁴⁷ emphasizes the need to ”[focus on the development of ethylene-based polyolefins and synthetic resins as end-use products, propylene-polypropylene, other engineering plastics as well as modified materials, synthetic and rubber materials made of butene and C4, end-products made with high performance polyurethane isocyanate and toluene, new materials, textile and engineering materials made of nylon, benzene and polyamide, PX-PTA-polyester and six other major industry chains” ⁴⁸, with similar language present also in Zhejiang‘s 14^th FYP on developing new materials industry: ⁴⁹„In the field of advanced basic materials, implement a number of digital and green transformation projects and production expansion projects for high-end and scarce products; in the fields of key strategic materials such as advanced semiconductor materials, new display materials, biomedical materials, high-performance fibers and composite materials, implement a number of industrialization and application expansion projects” ⁵⁰ or Chongqing’s 14 FYP on high quality development of manufacturing industry: ⁵¹„Use the raw material bases to encourage relevant enterprises to research, develop and manufacture high-performance PVA (polyvinyl alcohol) functional fibers, differentiated spandex, special polyester fibers, polyamide fibers, PU (polyurethane) microfibers and other products.” ⁵²

• (76) Through these and other means, the GOC therefore directs and controls virtually every aspect in the development and functioning of the sector.

• (77) In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting encouraged industries, including the production the main raw materials used in the manufacturing of HTYP. Such measures impede market forces from operating freely.

3.4.4.1.6.   Significant distortions according to Article 2(6a)(b), fourth indent of the basic Regulation: the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws

• (78) According to the information on file, the Chinese bankruptcy system delivers inadequately on its own main objectives such as to fairly settle claims and debts and to safeguard the lawful rights and interests of creditors and debtors. This appears to be rooted in the fact that while the Chinese bankruptcy law formally rests on principles that are similar to those applied in corresponding laws in countries other than China, the Chinese system is characterised by systematic under-enforcement. The number of bankruptcies remains notoriously low in relation to the size of the country’s economy, not least because the insolvency proceedings suffer from a number of shortcomings, which effectively function as a disincentive for bankruptcy filings. Moreover, the role of the State in the insolvency proceedings remains strong and active, often having direct influence on the outcome of the proceedings ⁵³.

• (79) In addition, the shortcomings of the system of property rights are particularly obvious in relation to ownership of land and land-use rights in China. ⁵⁴ All land is owned by the State (collectively owned rural land and State-owned urban land) and its allocation remains solely dependent on the State. There are legal provisions that aim at allocating land use rights in a transparent manner and at market prices, for instance by introducing bidding procedures. However, these provisions are regularly not respected, with certain buyers obtaining their land for free or below market rates ⁵⁵. Moreover, authorities often pursue specific political goals including the implementation of the economic plans when allocating land ⁵⁶.

• (80) Much like other sectors in the Chinese economy, the producers of HTYP are subject to the ordinary rules on Chinese bankruptcy, corporate, and property laws. That has the effect that these companies, too, are subject to the top-down distortions arising from the discriminatory application or inadequate enforcement of bankruptcy and property laws. Those considerations, on the basis of the evidence available, appear to be fully applicable also in the chemical fibers sector. The present investigation revealed nothing that would call those findings into question.

• (81) In light of the above, the Commission concluded that there was discriminatory application or inadequate enforcement of bankruptcy and property laws in the chemical fibers sector, including with respect to the product under review.

3.4.4.1.7.   Significant distortions according to Article 2(6a)(b), fifth indent of the basic Regulation: wage costs being distorted

• (82) A system of market-based wages cannot fully develop in China as workers and employers are impeded in their rights to collective organisation. China has not ratified a number of essential conventions of the International Labour Organisation (‘ILO’), in particular those on freedom of association and on collective bargaining ⁵⁷. Under national law, only one trade union organisation is active. However, this organisation lacks independence from the State authorities and its engagement in collective bargaining and protection of workers’ rights remains rudimentary ⁵⁸. Moreover, the mobility of the Chinese workforce is restricted by the household registration system, which limits access to the full range of social security and other benefits to local residents of a given administrative area. This typically results in workers who are not in possession of the local residence registration finding themselves in a vulnerable employment position and receiving lower income than the holders of the residence registration. ⁵⁹ Those findings lead to the distortion of wage costs in China.

• (83) No evidence was submitted to the effect that the chemical fibers sector, including the producers of HTYP, would not be subject to the Chinese labour law system described. The chemical fibers sector is thus affected by the distortions of wage costs both directly (when making the product under review or the main raw material for its production) as well as indirectly (when having access to capital or inputs from companies subject to the same labour system in China).

3.4.4.1.8.   Significant distortions according to Article 2(6a)(b), sixth indent of the basic Regulation: access to finance granted by institutions which implement public policy objectives or otherwise not acting independently of the State

• (84) Access to capital for corporate actors in China is subject to various distortions.

• (85) Firstly, the Chinese financial system is characterised by the strong position of State-owned banks ⁶⁰, which, when granting access to finance, take into consideration criteria other than the economic viability of a project. Similarly to non-financial SOEs, the banks remain connected to the State not only through ownership but also via personal relations (the top executives of large State-owned financial institutions are ultimately appointed by the CCP) ⁶¹ and, again just like non-financial SOEs, the banks regularly implement public policies designed by the GOC. In doing so, the banks comply with an explicit legal obligation to conduct their business in accordance with the needs of the national economic and social development and under the guidance of the industrial policies of the State ⁶². This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ⁶³.

• (86) While it is acknowledged that various legal provisions refer to the need to respect normal banking behaviour and prudential rules such as the need to examine the creditworthiness of the borrower, the overwhelming evidence, including findings made in trade defence investigations, suggests that these provisions play only a secondary role in the application of the various legal instruments.

• (87) For example, the GOC has clarified that even private commercial banking decisions must be overseen by the CCP and remain in line with national policies. One of the State’s three overarching goals in relation to banking governance is now to strengthen the Party’s leadership in the banking and insurance sector, including in relation to operational and management issues ⁶⁴. Also, the performance evaluation criteria of commercial banks have now to, notably, take into account how entities ‘serve the national development objectives and the real economy’, and in particular how they ‘serve strategic and emerging industries’. ⁶⁵

• (88) Specifically in the chemical fibers sector, the prioritisation of sectors on criteria related to industrial policies rather than creditworthiness of a given project is apparent from a number of policy documents, such as the Shandong Province’s 14^th FYP on developing the chemical industry which provides for the following with respective to chemical industry: ⁶⁶

Increase financial support. Strengthen fiscal policy incentives, ensure the overall involvement of special funds, support chemical enterprises to accelerate technological transformation, intelligent transformation, industry transfer, relocation into parks, elimination of obsolete capacities, etc., and implement policies such as tax exemption for imported major technical equipment, value-added tax credits and refunds, additional deductions of research and development expenses, and insurance compensation for the first (set) of technical equipment. Actively guide all kinds of financial institutions and social capital to invest in the chemical industry, give play to the advantages of policy-based finance, development finance and commercial finance, and increase financial support to the key areas of chemical industry and technology. ⁶⁷

• (89) Similarly, under the 14^th FYP on the high-end development of the chemical industry ⁶⁸ of the Jiangsu province, the local authorities are obliged to “[g]ive full play to the guiding role of government investment funds, flexibly expand funding channels and guide social capital investments.» ⁶⁹

• (90) These policies of financial support for strategic industries are then implemented at company level, as evidenced for instance by the agreement between Bank of China and Guxiandao on Party building. As explained on the company’s webpage, the Party building agreement, under which Guxiandao and the local branch of Bank of China would “further deepen cooperation and realize the deep integration of party building work with business development” would only represent a first stage, to be followed by Bank of China “further increas[ing] the credit extension to [Guxiandao] taking into account the actual needs of [the] enterprise[…], so as to further increase the international settlement volume“ which in turn „[…] will ensure new business development under the leadership of the party building”. ⁷⁰

• (91) Furthermore, bond and credit ratings are often distorted for a variety of reasons including the fact that the risk assessment is influenced by the firm’s strategic importance to the GOC and the strength of any implicit guarantee by the government. Estimates strongly suggest that Chinese credit ratings systematically correspond to lower international ratings. ⁷¹

• (92) This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ⁷². This results in a bias in favour of lending to SOEs, large well-connected private firms and firms in key industrial sectors, which implies that the availability and cost of capital is not equal for all players on the market.

• (93) Secondly, borrowing costs have been kept artificially low to stimulate investment growth. This has led to the excessive use of capital investment with ever lower returns on investment. This is illustrated by the growth in corporate leverage in the State sector despite a sharp fall in profitability, which suggests that the mechanisms at work in the banking system do not follow normal commercial responses.

• (94) Thirdly, although nominal interest rate liberalization was achieved in October 2015, price signals are still not the result of free market forces, but are influenced by government-induced distortions. The share of lending at or below the benchmark rate still represented at least one-third of all lending as of the end of 2018 ⁷³. Official media in China have recently reported that the CCP called for ‘guiding the loan market interest rate downwards.’ ⁷⁴ Artificially low interest rates result in under-pricing, and consequently, the excessive utilization of capital.

• (95) Overall credit growth in China indicates a worsening efficiency of capital allocation without any signs of credit tightening that would be expected in an undistorted market environment. As a result, non-performing loans have increased rapidly, with the GOC a number of times opting to either avoid defaults, thus creating so called ‘zombie’ companies, or to transfer the ownership of the debt (e.g. via mergers or debt-to-equity swaps), without necessarily removing the overall debt problem or addressing its root causes.

• (96) In essence, despite the steps that have been taken to liberalize the market, the corporate credit system in China is affected by significant distortions resulting from the continuing pervasive role of the State in the capital markets. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

3.4.4.1.9.   Systemic nature of the distortions described

• (97) The Commission noted that the distortions described in the Report are characteristic for the Chinese economy. The evidence available shows that the facts and features of the Chinese system as described above in Sections 3.4.4.1.1 – 3.4.4.1.5 as well as in Part I of the Report apply throughout the country and across the sectors of the economy. The same holds true for the description of the factors of production as set out above in Sections 3.4.4.1.6-3.4.4.1.8 and in Part II of the Report.

• (98) The Commission recalls that in order to produce HTYP, a range of inputs is needed. When the producers of HTYP purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned before. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors.

• (99) As a consequence, not only the domestic sales prices of HTYP are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also affected because their price formation is affected by substantial government intervention, as described in Parts I and II of the Report. Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout China. This means, for instance, that an input that in itself was produced in China by combining a range of factors of production is exposed to significant distortions. The same applies for the input to the input and so forth. No evidence or argument to the contrary has been adduced by the GOC or the exporting producers in the present investigation.

3.4.4.1.10.   Conclusion

• (100) The analysis set out in sections 3.4.4.1.2. to 3.4.4.1.9., which includes an examination of all the available evidence relating to China’s intervention in its economy in general as well as in the chemical fibers sector (including the product under review) showed that prices or costs of the product under review, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation as shown by the actual or potential impact of one or more of the relevant elements listed therein. On that basis, and in the absence of any cooperation from the GOC, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case.

• (101) Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation, as discussed in the following section.

3.4.4.2.   Representative country

3.4.4.2.1.   General remarks

• (102) The choice of the representative country was based on the following criteria pursuant to Article 2(6a) of the basic Regulation:

• — A level of economic development similar to China. For this purpose, the Commission used countries with a gross national income per capita similar to China on the basis of the database of the World Bank ⁷⁵;

• — Production of the product under review in that country ⁷⁶;

• — Availability of relevant public data in the representative country.

• — Where there is more than one possible representative country, preference should be given, where appropriate, to the country with an adequate level of social and environmental protection.

• (103) The Commission’s assessment on the selection of appropriate representative country can be summarised as follows.

3.4.4.2.2.   A level of economic development similar to China and production of the product under review

• (104) In the review investigation period, the World Bank classified countries with a similar level of economic development as China as ‘upper-middle income’ countries on a gross national income basis. In the First Note, a sizeable production of the product under review was found to exist only in five of these countries, namely in Belarus, Brazil, Mexico, Thailand and Türkiye.

• (105) However, in view of the fact that Belarus is not a WTO-member and not a market economy, the said country was not examined further as a potential representative country.

• (106) The Commission therefore further analysed in more detail Brazil, Mexico, Thailand and Türkiye as potential representative countries.

3.4.4.2.3.   Availability of relevant public data in the representative country

• (107) For the countries considered and mentioned above, the Commission further verified the availability of the public data, including the data on imports of factors of production as well as of financial data from the producers of the product under review in the potential representative countries.

• (108) The analysis of imports of the main factors of production showed that Türkiye imported overall more significant and representative undistorted volumes of the key inputs for production of the HTYP (namely PTA, MEG and Polyethylene terephthalate (‘PET’) chips) compared to Brazil, Mexico or Thailand.

• (109) The analysis further showed that Turkish imports were not materially affected by imports from China or any of the countries listed in Annex I to Regulation (EU) 2015/755 of the European Parliament and of the Council ⁷⁷. Furthermore, the HTYP production is significant in Türkiye and no particular trade distortions on the factors of production nor on HTYP exist in the country. Moreover, detailed and sufficiently representative data on import prices of the material inputs are readily available in the Global Trade Atlas (‘GTA’) for Türkiye.

• (110) Regarding the producers in representative countries and availability of their data, the Commission identified a HTYP producer KORDSA TEKNIK TEKSTIL A.S. (‘Kordsa Türkiye’) for which consolidated 2021 financial results are available. On the other hand, the financial data for Brazilian (KORDSA BRASIL S.A.), Mexican (Monosuisse, Performance Fibers Mexico Operations and Akra Polyester SA DE CV) and Thai companies (THAI TORAY SYNTHETICS CO LTD and TEIJIN POLYESTER (THAILAND) CO LTD.) producing HTYP are not readily available for the full investigation period and are not fully compliant with the International Financial Reporting Standards (for the Thai producers).

• (111) It is observed that Kordsa Türkiye does not produce solely HTYP, but approximately 86 % of its 2021 revenues were in the segment covering HTYP ⁷⁸. The Commission noted in this respect that if no financial information is readily available specifically and only in relation to the product under review (which is nearly always the case), the Commission seeks the closest readily available proxy, including consolidated information of producer(s) active, among others in the business covering the product under review. In these circumstances, the consolidated SG&A and profit identified for Kordsa Türkiye are therefore deemed sufficiently representative to be applied for the purposes of the present investigations.

• (112) Given the public availability of Kordsa Türkiye’s full and comprehensive annual report for 2021 ⁷⁹, the Commission therefore resorted to the use of the information included therein.

3.4.4.2.4.   Level of social and environmental protection

• (113) Having established that Türkiye was an appropriate representative country based on all of the above elements, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of Article 2(6a)(a) first indent of the basic Regulation.

3.4.4.2.5.   Conclusion

• (114) In view of the above analysis, Türkiye met the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation in order to be considered as an appropriate representative country.

3.4.5.   Dumping margin

• (115) In the absence of cooperation from Chinese exporting producers, and thus in the absence of specific information on Chinese price the dumping margin was determined on the basis of facts available in accordance with Article 18 of the basic Regulation.

• (116) To calculate the dumping margin, the Commission would generally construct the normal value multiplying the consumption volumes for each factor of production (as provided by the applicant) by the undistorted costs per unit established in Türkiye, as outlined in Section 4.5.4, further applying the manufacturing overheads to the undistorted costs of manufacturing (see Section 4.5.9) and the SG&A and profit established for Türkiye (see Section 4.5.8). Furthermore, the export price would be determined based on the publicly available import statistics.

• (117) However, instead of relying on the information provided by the applicant and/or on import statistics in this case, in light of the interim review investigation (with high level of cooperation covering significant part of the HTYP Union imports) ⁸⁰, the Commission relied on the published outcome of the said interim review investigation and dumping margins established therein (see recital (356)).

• (118) On this basis, the weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, were in the range of 9,7 % to 23,7 %. It was therefore concluded that dumping continued during the review investigation period.

3.5.   Likelihood of continuation of dumping

• (119) In accordance with Article 11(2) of the basic Regulation, it was examined whether it was likely that dumping established based on Article 18 of the basic Regulation would continue should the measures lapse.

• (120) To that end, the Chinese production capacity and spare capacity, the behaviour of Chinese exporters on other markets, the situation on the domestic market of China and the attractiveness of the Union market were considered.

3.5.1.   Production capacity and spare capacity in China

• (121) Given the lack of cooperation of the Chinese exporting producers in the expiry review, the spare capacity in China has been determined principally based on the publicly available statistical information (information extracted from Eurostat), the expiry review request, interim review request and on an independent industry report issued by a widely recognised global research and consultancy firm ⁸¹ (hereinafter ‘Wood Mac’) active, among others in the chemical sector. Reliability of the figures provided in the Wood Mac industry report was verified against and their accuracy was largely confirmed by the findings from the previous HTYP expiry review investigation ⁸² (‘2017 expiry review’).

• (122) The Commission performed a detailed spare capacity calculation, taking into account the production capacity of Chinese producers subject to measures, their production volumes, their exports to other countries and domestic consumption.

• (123) While in 2018, the production capacity was around [2 126 000 – 2 716 000] tonnes (consistent with the capacity in 2015 as outlined in the 2017 expiry review), it rose to [2 508 000 – 3 205 000] tonnes in the RIP. In fact, HTYP capacity of Chinese producers subject to measures in the RIP has superseded the worldwide HTYP consumption in the same period. Such sharp increase in production capacity is however coupled with a stagnant production, which oscillated at around [1 187 000 – 1 746 000] tonnes in the period 2018-2021, production volume being comparable to the review investigation period from the 2017 expiry review. At the same time the domestic consumption in the period 2018-RIP was stable, at around [1 048 000 –1 566 000] tonnes, moving in the same range as in 2015.