Commission Implementing Regulation (EU) 2025/291 of 13 February 2025 imposing a provisional anti-dumping duty on imports of decor paper originating in the People’s Republic of China

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	2025/291	14.2.2025

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 (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

1. PROCEDURE

1.1.   Initiation

• (1) On 14 June 2024, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of decor paper originating in the People’s Republic of China (‘PRC’ or ‘the country concerned’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union ² (‘the Notice of Initiation’).

• (2) The Commission initiated the investigation following a complaint lodged on 2 May 2024 by four Union producers of decor paper (‘the complainants’). The complaint was made by the Union industry of decor paper in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

1.2.   Registration

• (3) The Commission made imports of the product concerned subject to registration by Commission Implementing Regulation (EU) 2024/2718 (‘the registration Regulation’) ³ .

1.3.   Interested parties

• (4) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainants, other known Union producers, the known exporting producers, and the Chinese authorities, known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

• (5) Interested parties had an 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.

• (6) Hearings took place with the complainants (Felix Schoeller, Koehler Paper, Malta Decor & Munksjö Paper), LamiGraf S.A. and Interprint GmbH.

1.4.   Comments on initiation

• (7) The China National Forest Products Industry Association (CNFPIA) LamiGraf S.A., Kastomonu Italia S.p.a., Kastamonu Romania S.A., and Kastamonu Bulgaria AD (herein referred as the ‘Kastamonu Group’) and Marburger Tapetenfabrik, submitted comments on initiation. These concerned the standing of the complainants, the application of Article 2(6a) of the basic Regulation and evidence of significant distortions, the choice of representative country in the complaint, raw material distortions, the injury indicators, causation, and the Union interest. All those comments are addressed below in the relevant sections of this Regulation.

• (8) After initiation, the CNFPIA submitted that Felix Schoeller and Munksjö, two of the four complainants, were related to Chinese companies, and that one of the two also had imports from China from their related company. The CNFPIA argued that, based on the provisions of Article 4(1) of the basic Regulation, the two companies should thus have been excluded from the Union industry. In light of this, the CNFPIA added that the standing requirements set out in Article 5(4) of the basic Regulation might not be met.

• (9) According to the wording of Article 4(1)(i), as confirmed by the Court of Justice, it is for the Commission, in the exercise of its discretion, to determine whether it should exclude from the ‘Union industry’ producers which are related to exporters or importers or are themselves importers of the dumped product. The discretion must be exercised on a case-by-case basis, by reference to all the relevant facts. ⁴ Given that both related companies in the PRC mostly served their domestic market, and that quantities imported by the Union producers from their related companies in the PRC, if any, were negligible, the Commission considered that the exclusion of Felix Schoeller and Munksjö from the definition of the Union industry was unwarranted. Therefore, these claims were dismissed.

• (10) The CNFPIA submitted that the conditions set out in Article 3 of the basic Regulation for the determination of injury had not been met, arguing that during the period considered, there was no evidence of material injury to the Union industry.

• (11) The Commission recalled that in accordance with Article 5(3) of the basic Regulation, an investigation shall be initiated where the complaint contains sufficient evidence to justify the initiation of an investigation. In the complaint, the complainant argued that dumped imports of decor paper from the PRC have caused material injury to the Union industry. To support its argument, the complainant used Thailand as representative country to calculate a weighted average dumping margin in the range of [35-45 %], and analysed the Union industry consumption, profitability, sales and market share, production volume and production cost. The Commission considered that these were relevant elements for its assessment of the merits of the file, and that together with other information provided by the complainant, constituted sufficient evidence, meeting the requirements of Article 5(3) for the initiation of the investigation. Therefore, the claim by the CNFPIA was rejected.

• (12) LamiGraf submitted similar arguments on the injury trends, arguing that broader economic factors, such as the COVID-19 pandemic, geopolitical instability and energy crisis significantly impacted the industry’s financial performance, and thus injury could not have been mainly attributed to Chinese imports. LamiGraf added that the fluctuations in Union consumption can be attributed to the pandemic-led ‘stay-at-home’ economy followed by a market correction, and cannot be attributed to Chinese imports, and that overall sales and export sales of the complainants have been severely affected by the sanctions against Russia. The conditions in 2021 led to a growth in decor paper demand, which entailed diversification resulting in a rise in imports from China. The competitiveness of Chinese prices stems from the use of cost-efficient equipment, contrary to the complaining producers. Yet, at the same time, LamiGraf submitted that the heavy investments undertaken by the complainants do not indicate material injury.

• (13) The Commission considered that the complaint contained sufficient evidence of injury caused by dumped imports from China, including assessments of the effects of the COVID-19 pandemic on Union consumption, the impact of the energy crisis and the rising cost of raw materials, as well as Russia’s invasion of Ukraine and subsequent trade sanctions. Therefore, these claims were rejected.

1.5.   Sampling

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

Sampling of Union producers

• (15) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of volume of production and sales of the like product in the EU between 1 April 2023 to 31 March 2024 and the geographic location. This sample consisted of three Union producers. The sampled Union producers accounted for 60 % of the estimated total volume of production and 61 % of sales of the like product in the Union. The Commission invited interested parties to comment on the provisional sample. No comments on the provisional sample were received. The sample was considered representative of the Union industry.

Sampling of unrelated importers

• (16) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

• (17) Two unrelated importers provided the requested information and agreed to be included in the sample. In view of the low number of replies, the Commission decided that sampling was not necessary.

Sampling of exporting producers in the PRC

• (18) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the PRC to the EU to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

• (19) Five exporting producers in the country concerned provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned, and the authorities of the country concerned were consulted on the selection of the sample. No comments were received.

1.6.   Questionnaire replies and verification visits

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

• (21) Furthermore, the complainant provided in the complaint sufficient prima facie evidence of raw material distortions in the PRC regarding the product concerned. Therefore, as announced in the Notice of Initiation, the investigation covered those raw material distortions to determine whether to apply the provisions of Article 7(2a) and 7(2b) of the basic Regulation with regard to the PRC. For this reason, the Commission sent an additional questionnaire in this regard to the GOC.

• (22) The Commission sent questionnaires to the sampled Union producers, the sampled exporting producers in China, the known importers and users. The same questionnaires were made available online ⁵ on the day of initiation.

• (23) The Commission sought and verified all the information deemed necessary for a provisional determination of dumping, resulting injury and Union interest. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following companies:

Union producers

• — Felix Schoeller GmbH & Co. Kg, Osnabrück, Germany;

• — Malta Decor Sp. z o.o., Poznań, Poland;

• — Munksjö Tolosa S.A.U., Berastegi, Spain.

Users

• — LamiGraf S.A., Barcelona, Spain;

• — Interprint GmbH, Arnsberg, Germany.

Exporting producers in the PRC

• — Hangzhou Huawang New Material Technology Co. Ltd (HUAWANG)

• — Kingdecor Zhejiang Co. Ltd., (KINGDECOR)

1.7.   Investigation period and period considered

• (24) The investigation of dumping and injury covered the period from 1 April 2023 to 31 March 2024 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2020 to the end of the investigation period (‘the period considered’).

2. PRODUCT UNDER INVESTIGATION, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under investigation

• (25) The product under investigation is decor paper with the following characteristics:

• — weighing 30-150 g/m²; having an ash content between 5 % and 50 %;

• — having a Klemm absorbency of at least 12 millimetres per 10 minutes or a resin pick-up of 20 % to 200 %;

• — having a wet tensile strength of 6 to 12 Newton (N) per 15 millimetres;

• — having a Gurley porosity of 3 to 80 seconds per 100 millilitres;

• — having a smoothness of 20 to 300 according to the Bekk method;

• — in reels with a width up to 300 centimetres;

• — whether or not pre-impregnated with a combination of latices or natural binders (like starch);

• — excluding wallpaper and similar wallcoverings;

• — excluding papers saturated with water-based melamine, urea, phenol or any thermosetting, thermoplastic resin solutions (‘the product under investigation’).

• (26) There are five main product types, based on physical characteristics: print-base decor paper, uni-colour paper, backer paper, foil base paper and pre-impregnated decor paper.

• — Print-base decor paper is base-paper for printing sold to printers and specifically designed to be printed with different designs (e.g. wood, grain, marble);

• — Uni-colour paper is a single-colour, colour-saturated decor paper. It is characterised by its aptitude for penetration and impregnation processes. The colour is incorporated at the papermaking stage;

• — Backer paper is characterised by particular impregnation and tensile strength qualities. It is applied to the back of the substrate to prevent deformation during the lamination process;

• — Foil base paper is a type of decor paper that is used as base paper to produce finish foil, i.e. paper layers with a lacquer-coated surface that are coloured or printed on; and

• — Pre-impregnated decor paper (‘PRIP’) is decor paper that has already been impregnated with resin in the paper mill by means of a size press.

• (27) Decor paper is used as a surface material for decorative applications. Decor paper’s end use is mainly in the furniture, interior-design and construction and renovation industries as a laminate on a backing material.

2.2.   Product concerned

• (28) The product concerned is decor paper originating in the People’s Republic of China, currently falling under CN codes ex 4802 54 00 , ex 4802 55 , ex 4805 91 00 and ex 4811 60 00 (TARIC codes 4802 54 00 10, 4802 55 15 10, 4802 55 25 10, 4802 55 30 10, 4802 55 90 10, 4805 91 00 10, and 4811 60 00 10) (‘the product under investigation’).

2.3.   Like product

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

• — the product concerned when exported to the Union;

• — the product under investigation produced and sold on the domestic market of the PRC; and

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

• (30) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

3. DUMPING

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

• (31) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation with regard to the PRC, the Commission considered it appropriate to initiate the investigation with regard to the exporting producers from this country having regard to Article 2(6a) of the basic Regulation.

• (32) Consequently, in order to collect the necessary data for the eventual application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in the PRC to provide information regarding the inputs used for producing decor paper. Two exporting producers submitted the relevant information.

• (33) 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. In addition, in point 5.3.2 of the Notice of Initiation, 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 Notice of Initiation in the Official Journal of the European Union.

• (34) No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline. 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 the PRC.

• (35) In the Notice of Initiation, the Commission also specified that, in view of the evidence available, it may need to select an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks.

• (36) On 2 October 2024, the Commission informed by a First Note (‘the First Note’ or ‘1st FOP Note’) interested parties on the relevant sources it intended to use for the determination of the normal value. In that note, the Commission provided a list of all factors of production (‘FOP’) such as raw materials, labour and energy used in the production of decor paper. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified possible representative countries, namely Thailand as an appropriate representative country.

• (37) CNFPIA made the following general comments, in response to the ‘1st FOP Note’: (1) ‘Significant distortions with respect to the product concerned in China do not exist and have not been proved by the Commission in China.’ (2) ‘Only those factors of production proven to be distorted should be replaced.’ (3) ‘The application of Article 2(6a) of the Basic Regulation in the case and its resulting methodology is inconsistent with the WTO [Anti-dumping Agreement (‘ADA’)].’ No other parties submitted comments on the 1st FOP Note. The comment on the existence of significant distortions, is addressed in Section 3.2.1. below where the Commission described the relevant significant distortions. Concerning the comment regarding the factors of production, the Commission recalled that, according to Article 2(6a)(a) of the basic Regulation, once the Commission found that significant distortions exist, domestic costs may be used but only to the extent that they are positively established not to be distorted, on the basis of accurate and appropriate evidence Finally, with regard to the alleged inconsistency of Article 2(6a) of the Basic Regulation in the case and its resulting methodology with the WTO ADA, the Commission refers to Sections 3.2.1.9 and 3.2.1.10 below.

• (38) On 6 December 2024, the Commission informed the interested parties by a Second Note (‘the Second Note’) on the relevant sources it intended to use for the determination of the normal value, with Thailand as the representative country. It also informed interested parties that it would establish selling, general and administrative (‘SG&A’) costs and profits based on four companies SIAM KRAFT INDUSTRY CO LTD, DOUBLE A (1991) PUBLIC COMPANY, THAI CONTAINERS GROUP CO LTD and SIG COMBIBLOC CO LTD. No comments were received to the Second Note within the deadline.

3.2.   Normal value

• (39) 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’.

• (40) 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 referred hereinafter as ‘SG&A’).

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

3.2.1.   Existence of significant distortions

• (42) Article 2(6a)(b) of the basic Regulation states 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. ’

• (43) As the list in Article 2(6a)(b) of the basic Regulation is non-cumulative, not all the elements need to be given 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.

• (44) However, any conclusion on significant distortions within the meaning of Article 2(6a)(a) of the basic Regulation 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 provide 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.

• (45) 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’.

• (46) Pursuant to this provision, the Commission issued a country report concerning China (‘the Report’) ⁶, which contains evidence of 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 selected sectors (such as the wood-based products sector). Interested parties were invited to rebut, comment, or supplement the evidence contained in the investigation file at the time of initiation. The Report ⁷ was placed on the investigation file at initiation. The complaint also contained some relevant evidence complementing the Report.

• (47) More specifically, the complainant relied on the evidence contained in the Report, to stress the presence of systemic significant distortions in the economy of the PRC, a ‘socialist market economy’ where the Chinese Communist Party (‘CCP’) guides both the public and private sector.

• (48) The complainant explained that the production of decor paper in the PRC is affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation and that, as a result, it is not appropriate to use domestic prices and costs to establish normal value. In particular, the complainants argued the presence of significant distortions in the costs of the raw materials used to produce decor paper in the PRC, mainly wood pulp and TiO2, as well as distortions in the cost of energy ⁸.

• (49) To support this position, the complainant relied heavily on the evidence contained in the Report, as well as to findings in past Commission’s cases.

• (50) The complainants mentioned that the decor paper industry is part of the Chinese forestry and wood products sectors and recalled the following elements pointing to the existence of significant distortions.

• (51) First, the decor paper sector is subject to the distortions of the costs of the basic raw materials used to manufacture decor paper, mainly wood pulp and TiO2:

• — The Commission concluded in its 2017 China Country Report that ‘China uses a broad range of instruments allowing it to significantly influence the prices of raw materials. By artificially increasing or decreasing the level of raw materials supply, or simply by centrally setting the prices, the government can steer the prices upwards or downwards’ ⁹. This conclusion applies both to wood-based raw materials and to chemicals, as expressly mentioned in the Report ¹⁰.

• — In addition, domestic wood pulp users gain an unfair comparative advantage due to the imposition of export duties on several types of wood pulp and the encouragement of foreign investment in the Chinese wood-processing industry ¹¹.

• — The Government of China (‘ GOC’) underlines, in its 14th Five-Year Plan (‘ FYP ’), the urge to support and develop the papermaking and chemical industries, by stating that it ‘will transform and upgrade traditional industries […] speed up the transformation and upgrading of enterprises in key industries as the chemical industry and papermaking and improve the green manufacturing system’ ¹² . The same concerns the forest industry, where it ‘will improve the infrastructure of state-owned forest farms and forest zones’ ¹³.

• — The 2019 Catalogue for Guiding Industry Restructuring, sets specific production targets for various forms of wood pulp and mentions various paper and wood pulp production sectors to be eliminated if annual capacities are not met ¹⁴. This support fits squarely into the system of planning in the PRC, driving resources to sectors designated as strategic or otherwise politically important by the government ¹⁵.

• — Similar to the 14th FYP for Forestry, which aims to support the use of wood as a raw material ¹⁶, the chemicals sector is also subject to government intervention. Over half of the total chemicals production in the PRC is accounted for by state-owned enterprises (‘SOEs’) ¹⁷.

• (52) Second, the decor paper sector is subject to the distortions of energy costs:

• — The Commission has reported that ‘normal market considerations do not prevail on the Chinese market for energy, given the significant state intervention in production and pricing’ ¹⁸. In the PRC, about 50 % of energy generation capacity is state-owned, with the entire electricity grid controlled by two state-owned enterprises: State Grid Corporation of China and China Southern Power Grid ¹⁹. Energy prices are centrally set by the National Development and Reform Commission’s Department of Price, using price differentiation strategies to benefit ‘encouraged industries’ ²⁰, including the papermaking one. At the provincial level, additional price differentiation policies are also applied ²¹. GOC intervention often involves energy provision at subsidised rates or rebates ²².

• — Additionally, decor paper producers, including Zhejiang Kingdecor Paper and Hangzhou Huawang New Material Technology, can benefit from preferential electricity rates charged in certain industrial zones to which their production facilities belong ²³. Moreover, in some areas, authorities have started to buy and sell electricity themselves ²⁴.

• — Energy costs in the PRC are also indirectly distorted by the government’s decision to lower coal-fired electricity prices. This was aimed at controlling the excessive capacity growth that stemmed from previous substantial subsidies for coal production ²⁵.

• (53) Third, producers in the decor paper sector have access to finance granted by institutions which implement public policy objectives or otherwise are not acting independently from the state:

• — In the Report, the Commission described the continuity between government and all major aspects of the financial system in the PRC, concluding that ‘ this reflects a distorted situation which is de facto not comparable to other market-based economies ’ ²⁶.

• — The financial system as such also requires private banks to support encouraged industries in accordance with governmental policy plans. For example, Article 34 of the Commercial Banking Law No 34 of 2015 states that ‘ commercial banks shall conduct their business of lending in accordance with the needs of the national economic and social development and under the guidance of the industrial policies of the State ’.

• — As confirmed by the Commission in several investigations, the development of encouraged industries, such as the papermaking one, is actively pursued by the GOC as a public policy objective, including through preferential lending ²⁷.

• (54) Fourth, much like in other sectors of the Chinese economy, the decor paper sector is subject to the distortions resulting from public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces ²⁸.

• (55) Fifth, the decor paper sector is subject to the distortions resulting from the lack, discriminatory application, or inadequate enforcement of bankruptcy, corporate or property laws ²⁹.

• (56) Sixth, wage costs are distorted in the decor paper sector as well ³⁰.

• (57) In conclusion, the complainant argued that significant distortions pursuant to Article 2(6a) of the basic Regulation are present in the decor paper sector.

• (58) 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.

• (59) 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 concerned. 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.

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

• (60) 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’ ³¹.

• (61) The state-owned economy is the ‘leading force in the national economy’ and the state has the mandate to ensure its ‘consolidation and growth’ ³². 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.

• (62) 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 ³³.

• (63) In addition, under Chinese law, the socialist market economy is developed under the leadership of the 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.

• (64) 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.

• (65) 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’ ³⁴. This illustrates the unquestioned and ever-growing control of the CCP over the economic system of China.

• (66) This leadership and control are inherent to the Chinese system and go 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.

• (67) 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 ³⁵. 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.

• (68) 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.

• (69) 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.

• (70) 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.).

• (71) 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 ³⁶.

• (72) Second, on the level of allocation of financial resources, the financial system of China is dominated by the state-owned commercial and policy 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 ³⁷.

• (73) 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 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 ³⁸.

• (74) 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 ³⁹.

• (75) 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 ⁴⁰.

• (76) 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 ⁴¹.

3.2.1.2.   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

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

• (78) The sector of the product concerned is mainly served by private companies, such as Hangzhou Huawang New Material Technology (also called ‘Huawon’) ⁴², Zhejiang Kingdecor Paper ⁴³, Qifeng New Materials ⁴⁴, or Zhejiang Hengda New Materials ⁴⁵.

• (79) The investigation however established that the main raw material used for the production of decor paper, i.e. wood pulp and TiO2, are served both by SOEs. For instance, the sector of wood pulp is served by several state-controlled companies such as Fujian Qingshan Paper Industry Co. ⁴⁶ and Shandong Chenming Paper Holding Co. ⁴⁷.

• (80) Moreover, in Commission Implementing Regulation (EU) 2024/1923 ⁴⁸ imposing a provisional anti-dumping duty on imports of titanium dioxide originating in the People’s Republic of China (‘TiO2’), the Commission established that the sector of TiO2 is also served by a number of state-controlled companies, such as Pangang Group Vanadium and Titanium Resources, Ltd. ⁴⁹ (‘Pangang’) part of Pangang Group, a subsidiary of the SOE group Anshan Iron and Steel Group (‘Ansteel’) ⁵⁰, had a significant degree of state ownership (more than 54 %) ⁵¹.

• (81) Fujian Qingshan Paper Industry Co. states that ‘In the new development stage, the company will be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era’ ⁵². Additionally, Article 98 of the company’s Articles of Association stipulates that ‘The company’s Party committee shall perform its duties in accordance with the Party constitution and other Party regulations: (i) Ensure supervision of the Party and state policies and the implementation of the decisions and arrangements of the Party Central Committee, the State Council, the Provincial Party Committee and the Provincial Government in the company’ ⁵³ . Similarly, Shandong Chenming Paper Holding Co’s Party committee claims that ‘[w]herever the enterprise develops, the Party organization will be established, wherever the key points are, the Party building work will be extended, so as to achieve resonance, mutual integration and progress between Party building and production, operation and management’ ⁵⁴.

• (82) Moreover, CCP interventions into operational decision making have become the norm not only in SOEs but also in private companies ⁵⁵, with the CCP claiming leadership over virtually every aspect of the country’s economy. Indeed, the state’s influence by means of CCP structures within companies effectively results in economic operators being under the government’s control and policy supervision, given how far the state and Party structures have grown together in China.

• (83) The decor paper sector is also subject to several government policies, as the wood pulp sector has been listed as an encouraged industry both in the 2019 Guiding Catalogue for Industry Structural Adjustment ⁵⁶, as well as in its 2024 updated version ⁵⁷. Similarly, and as established in Implementing Regulation (EU) 2024/1923 imposing a provisional anti-dumping duty on imports of titanium dioxide originating in the People’s Republic of China ⁵⁸, in the 2024 version of Guidance Catalogue for the Industry Structural Adjustment directly addresses the TiO2 sector by listing the TiO2 sulfuric acid process as a restricted industry, while its 2019 version lists the TiO2 chloride process as an encouraged one ⁵⁹.

• (84) Furthermore, the 14th FYP on economic and social development and 2035 perspectives sets the following objective: ‘Transform and upgrade traditional industries, promote the optimization of layout and structural adjustment of raw material industries such as petrochemicals, steel, nonferrous metals, and building materials, expand the supply of high-quality products such as light industry and textiles, accelerate the transformation and upgrading of key industries such as chemicals and papermaking’ ⁶⁰.

• (85) Also, the 2022 Guiding Opinion on Promoting the High Quality Development of the Light Industry ⁶¹ requires to ‘Accelerate breakthroughs in key technologies: Regarding the weak links in industries such as papermaking (…) a number of technological innovation roadmaps in key areas will be examined, drawn up and released (…) technological research and development, engineering and industrialization will be deepened and fostered, the establishment of core technological systems will be accelerated, and the industry’s technological level will be raised ⁶²’ and ‘foster a number of smart manufacturing outstanding scenari in industries such as […] papermaking’ ⁶³ .

• (86) Government control and policy supervision can be also observed at the level of the relevant industry associations ⁶⁴. For instance, the China National Forest Products Industry Association (‘CNFPIA’) has set up a special committee on decor paper ⁶⁵. The CNFPIA states in Article 3 of its Articles of Association that the organisation ‘accepts the business guidance, supervision and management by the entities in charge of registration and management, by the entities in charge of Party building, as well as by the relevant administrative departments in charge of industry management’ ⁶⁶.

• (87) Hangzhou Huawang New Material Technology is a member of the CNFPIA and serves as a vice-president of CNFPIA’s special committee on decor paper ⁶⁷.

• (88) Zhejiang Kingdecor Paper is also a member of CNFPIA and serves as a director of CNFPIA’s special committee on decor paper ⁶⁸

• (89) Consequently, even privately owned producers in the sector of the product concerned are prevented from operating under market conditions. Indeed, both public and privately owned enterprises in the sector are subject to policy supervision and guidance.

3.2.1.3.   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

• (90) The GOC is in position to interfere with prices and costs through state presence in firms. Indeed, CCP cells in enterprises, state-owned and private alike, represent an important channel through which the state can interfere with business decisions.

• (91) 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 ⁶⁹) and the company shall provide the necessary conditions for the activities of the Party organisation.

• (92) In the past, this requirement appeared 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 ⁷⁰, including exercising pressure on private companies to put ‘patriotism’ first and to follow Party discipline ⁷¹.

• (93) Already in 2018, it was reported that Party cells existed in 73 % of some 2,57 million privately owned companies, with growing pressure for the CCP organisations to have a final say over the business decisions within their respective companies ⁷². These rules are of general application throughout the Chinese economy, across all sectors, including to the producers of the product concerned and the suppliers of their inputs.

• (94) 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’) ⁷³ was released, which further expanded the role of the Party committees in private enterprises.

• (95) Section II.4 of the Guidelines states: ‘[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 ⁷⁴.

• (96) The present investigation confirmed that overlaps exist between managerial positions and CCP membership/functions in the decor paper sector. To provide an example, a member of the board of directors of Xianhe, the holding company of Kingdecor, also serves as the Party secretary of the company ⁷⁵. As the investigation has found, Xianhe ‘responded to the call of the Party central committee and actively integrated into the new development pattern’ ⁷⁶.

• (97) Another example of this overlap between managerial positions and CCP membership/functions, is the case of Qifeng New Material, whose chairman of the board of directors is a member of the CCP ⁷⁷. In 2023, Qifeng New Material, ‘adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and under the strong leadership of the company’s Party Committee and Board of Directors, [the company] actively explored both international and domestic markets’ ⁷⁸ .

• (98) An additional example was found in Fujian Qingshan Paper Industry Co. where the chairman of the board of directors also serves as the secretary of the Party committee ⁷⁹. In the first half of 2024, the company ‘adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, comprehensively strengthened party building, [and] actively promoted the deep integration of party building and production and operation business’ ⁸⁰ .

• (99) The state’s presence and intervention in the financial markets as well as in the provision of raw materials and inputs further have an additional distorting effect on the market ⁸¹. Thus, the state presence in firms, in the decor paper and other sectors (such as the financial and input sectors) allows the GOC to interfere with respect to prices and costs.

3.2.1.4.   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

• (100) 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, provincial and local governments must focus on. Relevant plans exist at all levels of government and cover virtually all economic sectors. The objectives set by the planning instruments are of a binding nature and the authorities at each administrative level monitor the implementation of the plans by the corresponding lower level of government.

• (101) 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 ⁸².

• (102) The Chinese authorities have enacted a number of policies guiding the functioning of the decor paper sector.

• (103) For example, in its 14th FYP on Economic and Social Development and 2035 perspectives, the Shandong province intends to ‘optimize and upgrade traditional industries: […] optimize and refine classical industries such as textiles and clothing, food, papermaking, […]’ ⁸³ .

• (104) Furthermore, the Fujian province 14th special FYP on the High-Quality Development of Manufacturing Industry requires to ‘focus on improving the quality of household paper, packaging paper and cardboard, special paper and cardboard, optimize the variety structure, research and development of pulp and paper fiber resources comprehensive utilization’ ⁸⁴.

• (105) Additionally, at provincial level, the Fujian Special Plan for the High-Quality Development of Manufacturing Industry during the 14 FYP period, specifies that for ‘papermaking and paper products: [the government shall] guide (…) Qingshan paper and other enterprises to strengthen indigenous innovation capacity building, raise design integration capacities and improve the level of production process, technology and equipment’ ⁸⁵.

• (106) Also, in the Zhejiang province, the investigation confirmed the existence of preferential policies of the public authorities and state-owned banks towards paper manufacturers as the province ‘guides the Longyou county financial institutions to improve the financial environment of key enterprises, continues to optimize financial services, increase support to the real economy, especially to paper industry’ ⁸⁶.

• (107) Furthermore, the inputs used to produce decor paper are also subject to governmental policies. More specifically, this is the case for wood pulp which is covered by the PRC’s 14th FYP on the Development of the Forest and Grassland Industry (2021-2025) ⁸⁷ (‘14th Forest FYP’) requiring as regards ‘pulp and papermaking: [to] accelerate the elimination of obsolete production capacity and reduce polluting emissions [and] to promote the technological transformation and improve energy and raw materials utilization’. The investigation in the sector of TiO2 also found that the GOC has measures in place to induce operators to comply with the public policy objectives concerning that sector ⁸⁸.

• (108) Through these and other means, the GOC therefore directs and controls virtually every aspect in the development and functioning of the sector, as well as the upstream inputs.

• (109) In sum, the GOC has measures in place to induce operators to comply with the public policy objectives concerning the sector. Such measures impede market forces from operating freely.

3.2.1.5.   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

• (110) 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.

• (111) 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 ⁸⁹.

• (112) 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 ⁹⁰. 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 ⁹¹. Moreover, authorities often pursue specific political goals including the implementation of the economic plans when allocating land ⁹².

• (113) Much like other sectors in the Chinese economy, the producers of the product concerned 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 forestry and wood processing sector, and therefore the decor paper sector. The present investigation revealed nothing that would call those findings into question.

• (114) In light of the above, the Commission concluded that there was discriminatory application or inadequate enforcement of bankruptcy and property laws in the sector of the product concerned.

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

• (115) 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 fundamental ILO conventions, in particular those on freedom of association and on collective bargaining ⁹³.

• (116) 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 ⁹⁴. 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.

• (117) 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 ⁹⁵.

• (118) No evidence was submitted to the effect that the decor paper sector would not be subject to the Chinese labour law system described. The sector is thus affected by the distortions of wage costs both directly (when making the product concerned 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).

3.2.1.7.   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

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

• (120) First, the Chinese financial system is characterised by the strong position of state-owned banks ⁹⁶, which, when granting access to finance, take into consideration criteria other than the economic viability of a project. Similar 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) ⁹⁷ and they regularly implement public policies designed by the GOC.

• (121) 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 ⁹⁸. 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.

• (122) 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 ⁹⁹. 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’ ¹⁰⁰ .

• (123) 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 ¹⁰¹. This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ¹⁰². 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.

• (124) Second, 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.

• (125) Third, 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 ¹⁰³. Official media in China have recently reported that the CCP called for ‘guiding the loan market interest rate downwards’ ¹⁰⁴. Artificially low interest rates result in under-pricing, and consequently, the excessive utilization of capital.

• (126) Overall credit growth in the 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.

• (127) 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.

• (128) No evidence was submitted in the present investigation demonstrating that the sector of the product concerned is not affected by the government intervention in the financial system in the sense of Article 2(6a)(b), sixth indent of the basic Regulation. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

3.2.1.8.   Systemic nature of the distortions described

• (129) 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 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 and in Part II of the Report.

• (130) The Commission recalls that in order to produce the product concerned, certain inputs are needed. When the producers of the product concerned 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. These distortions were described in detail above, in particular in recitals (51) to (128) above. The Commission pointed out that the regulatory setup underpinning those distortions is generally applicable, decor paper producers being subject to those rules as any other economic operator in China. The distortions have therefore a direct bearing on the cost structure of the product concerned.

• (131) As a consequence, not only the domestic sales prices of the product concerned 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.

• (132) 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.

• (133) No evidence or arguments to the contrary has been adduced by the GOC in the present investigation.

3.2.1.9.   Arguments put forward by interested parties

• (134) First, the CNFPIA took the position that Article 2(6a) of the basic Regulation is inapplicable due to its incompatibility with the WTO agreements and the rulings of the WTO Dispute Settlement Body (‘DSB’).

• (135) In particular, CNFPIA argued that:

• (a) since some provisions of China’s WTO Accession Protocol relevant for dumping calculation expired on 11 December 2016, the EU must respect its corresponding obligations under WTO law;

• (b) in line with the Appellate Body’s findings in DS473 ¹⁰⁵, for the purpose of calculating the costs in order to obtain the normal value of the product concerned when the domestic price in the exporting country cannot be used, the investigating authorities are not allowed to evaluate the costs reported in the records kept by the exporter/producer pursuant to a benchmark unrelated to the costs of production in the country of origin.

• (136) Second, the CNFPIA submitted that the alleged distortions are not well evidenced and, even if they were to exist, they did not affect the product concerned.

• (137) Furthermore, CNFPIA expressed the following:

• (a) the allegations in the complaint are general in nature and concern China’s economy structure, rather than the sector of the product concerned. They largely rely on the Report and on previous Commission’s investigations. The evidential value and the relevance of the alleged cross-cutting factors existing in China’s economy that are deemed distortive according to the Report is questionable. In particular, the Report does not reveal any links to the Chinese decor paper industry. With respect to the previous Commission investigation, the complainants’ reliance on the findings in the okoumé plywood case is, questionable, since the evidence in that case in different to the one relevant for the present investigation, as well as because the determinations on government interventions pursuant to Article 2(6a)(b) of the basic Regulation from the okoumé plywood case cannot be presumed to equally affect the decor paper market;

• (b) the complainants did not provide adequate evidence indicating that the decor paper market is served ‘to a significant extent’ by companies which are under State control, or that there would be State presence in firms ‘allowing the State to interfere with respect to prices and costs’. Nor did the complainants specify what is the total number of Chinese decor paper producers and the market share of the companies allegedly controlled by the GOC. In this respect, the parties pointed out that the state-owned enterprise Jilin Group, referred to by the complainants, represents solely around 10 % of the total exports of the product under investigation to the EU in the investigation period. The parties further submitted that the complainants also failed to produce any evidence demonstrating the CCP presence as far as the parties are concerned.