One of the Chinese aluminium manufacturers fighting a dumping finding against it has challenged Australian government and customs conclusions about what defines a “public body”.
The intersection between Chinese government enterprises and commercial manufacturing was aired at the start of a Federal Court hearing yesterday, over a decision by the attorney general to support the dumping conclusions reached by the Australian Customs and Border Protection Service in 2010.
Customs had found that the aluminium smelter company Chalco – which is 41 per cent owned by Chinalco, the 100 per cent government-owned aluminium corporation – constituted a public body. Chalco was identified as the largest producer of primary aluminium, or ingots, in the country, and was a primary supplier of all the Chinese manufacturers caught up by the customs investigation.
But Mr Neil Williams SC, for manufacturer Panasia Aluminium (China) Ltd, said to be defined as a “public body” entities needed to possess, exercise or be vested with government authority, or by statute or other legal instrument exercise governmental functions.
“Chinalco (imposes) state mandated pricing policies on its subsidiaries. That doesn’t show that Chalco exercises governmental authority,” he said.
Mr Neil said customs had also erred by not using the cost of aluminium in the Chinese market, but instead considered prices on the London Metals Exchange. He said customs should have looked instead at competition between primary suppliers of aluminium, and there was “no evidence” that it wasn’t a competitive market in China.
The court heard customs had identified a “distorting effect” of government, that a combination of export taxes and no VAT rebate caused a “significant increase in the supply of primary aluminium in China”, which pushed prices down. Mr Neil said governments around the world affected prices via taxation, and pointed to the Australian government’s recent imposition of a carbon tax regime.
Customs found that the extruded aluminium products exported to Australia had been dumped with margins of 2.7 to 25.7 per cent, and subsidised from 3.8 per cent to 18.4 per cent, in the process materially damaging the Australian market.
The hearing continues.
