Abdul Rahman Al-Zamil, chairman of the executive council of Saudi Export Development Center (SEDC), said China had no grounds to pursue the dumping investigation on imports of methanol and butanediol (BDO) it launched in late June.

"We do not subsidize our exporters" of petrochemicals, he told a news conference in Riyadh. He said China's protection policy against petrochemical imports was unacceptable and demanded the Saudi government adopt a clear and frank stand on the issue.

"This is not fair for two major trading partners," he said, referring to China and Saudi Arabia's mostly duty-free bilateral trade, which surpassed $40 billion in 2008, according to SABB bank.

He described the Chinese measure as a direct threat to the Saudi economy as it ignored the agreements signed by the two countries. He also urged the Saudi private sector to work for protecting their rights.

Al-Zamil said Saudi exporters feared China would levy punitive tariffs on the two products from Saudi Arabia, Indonesia, Malaysia and New Zealand while a lengthy investigation goes on at the request of several Chinese producers. "The damage will be done while they study it for one, two, or even 100 years," he said.

Methanol and BDO make up between 10 and 15 percent of the Kingdom's $2 billion annual petrochemicals exports to China, according to Al-Zamil. He said the group was asking the Saudi government to impose tariffs on industrial imports from China in return.

"The Chinese are dumping on our market," he said. "We want our government ... to apply the same principles, the same customs duties" that the Chinese are placing on Saudi goods, he added.

Al-Zamil said Saudi Arabia had reduced customs tariff on foreign imports to zero on medicine and foodstuff and five percent for all other products, especially after its accession to the World Trade Organization.

He estimated total Saudi imports at $150 billion. "From China alone we import goods worth SR47 billion ($13 billion), which represents 11 percent of our total imports," he told reporters.

He put Saudi Arabia's nonoil exports at SR125 billion ($33 billion) in 2008 in which China's share is SR7.5 billion ($2 billion).

Al-Zamil called for a working team comprising representatives from the ministries of foreign, commerce and finance and petrochemical industries to confront the Chinese action.

© Arab News 2009

 

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