Surrogate Country Power Rankings 2014

When Commerce dropped India from the China surrogate country list in June of 2011, the field for surrogate countries was opened up. Up until that time, India regularly served as the principal surrogate country for China AD cases. In 2014, Thailand remains the most popular choice as principal surrogate, with Philippines and Indonesia being the only other countries used with any regularity. Difficulties in obtaining surrogate values for the other countries on the list — especially usable public financial statements — have limited their use. For Vietnam, the other major NME country investigated by Commerce in 2014, India remains on the list of economically comparable countries, but increasingly in the recent past has been bypassed in favor of other countries, such as Bangladesh and Indonesia.

In December 2014, Commerce released its new list of surrogate countries for China. Neither Indonesia nor the Philippines are on the new list, meaning that Commerce and parties in China NME cases will face increasing difficulties in finding usable surrogate countries on the official list, outside of Thailand. Perhaps reflecting these new difficulties, Commerce has begun to allow more countries not on the list to serve as surrogate countries.

The following is a list of surrogate countries used in investigation, review and new shipper finals that were completed in 2014 (not including cases that went AFA or had no shipments).

* South Africa (not shown) was used in one case.

Final China Surrogate Country Power Rankings for 2014

1. Thailand (10)

Thailand maintained its number one position for a second straight year.
As in 2013, 10 Chinese cases used Thailand as the primary surrogate in 2014, though the number of Chinese final determinations that used a surrogate country increased from 24 in 2013 to 28 in 2014.
Many of the cases involved metal fabricated products such as tapered roller bearings, steel nails, copper pipe & tube, steel threaded rod, hand trucks, hangers, prestressed concrete steel rail tie wire, and diamond sawblades.
The other two products which contributed to Thailand’s dominance were crawfish tail meat and 1,1,1,2-Tetrafluroethane (a refrigerant).
Financials for companies not listed in the stock market are publicly available in Thailand as they are in India, which, along with a diverse manufacturing base has catapulted Thailand to the top of the list and kept it there.

2. Philippines (9)

The Philippines surged past Indonesia into second place on the chart and almost caught Thailand at the top of the table with 9 cases choosing it as the primary surrogate.
In 2013, the Philippines was already used more often than Indonesia for China cases and this trend intensified in 2014.
Consumer products such as wood flooring and wooden bedroom furniture used Philippines as the primary surrogate.
Activated carbon and chlorinated isocyanurates are chemical products which used the Philippines.
Philippines was the primary surrogate country for industrial products such as pure magnesium and aluminum extrusions.
Fresh garlic was an agricultural product which used the Philippines for its review this year.
Non-stock market listed company financials are publicly available in the Philippines adding to its appeal.
As of 2014, Philippines no longer shows up on the surrogate country list for China, so it unlikely that it will hold on to its place near the top if the table in 29015.

3. Indonesia (5)

Indonesia drops to third place, serving as the primary surrogate 4 times for China and once for Vietnam.
For frozen fish fillets from Vietnam, Indonesia remains the surrogate country of choice.
Two citric acid reviews were completed in 2014 and both used Indonesia as the primary surrogate.
The 2011-2012 PET film review and the monosodium glutamate investigation also used Indonesia.
Indonesia could be set for a further tumble in 2015 as it is no longer on the list of economically comparable countries for China, though it was still used for Vietnam despite dropping from Vietnam’s surrogate country list.

4. India (3)

India climbs to fourth on the chart as it was used in 3 cases up from a single case a year ago.
Two Vietnamese cases used India: Welded Stainless Pressure Pipe and OCTG. It was also used for the Steel Nails preliminary. so India seems to be the primary Vietnamese surrogate for steel products.
India is no longer on the surrogate country selection list for China cases, but it was used for the 1-Hydroxyethylidene-1, 1-Diphosphonic Acid 2012-2013 review. In that case, none of the listed countries were considered significant producers of comparable merchandise and the only country parties submitted information for was India.

5. Ukraine (1)

A tough year for Ukraine as it drops a spot in the power rankings. Ukraine was used in only a single case in 2014, compared to 3 in 2013.
While graphite electrodes continued to use Ukraine as the primary surrogate country, the silica bricks investigation went negative at the ITC final.
The other case which used Ukraine in 2013 was fresh garlic which shifted to the Philippines for its review concluded in 2014.

6. Bulgaria (1)

Bulgaria was only used in a single case in 2013 – the hardwood plywood investigation which went negative at the ITC.
However, despite that setback, Bulgaria found some favor in the Frontseating Service Valves annual review to maintain its position on the chart as a viable surrogate country.

7. Bangladesh (1) (NEW ENTRY)

Bangladesh has been used in the Vietnamese Frozen Fish Fillet and Frozen Warmwater Shrimp cases in the past and returns thanks to its use in the 2012-2013 review of shrimp.
The 2011-2012 shrimp review used Indonesia as the primary surrogate country so it will be interesting to see if Bangladesh can continue its comeback in 2015.

8. Romania (1) (NEW ENTRY)

Romania has only been used in a single case – a Fresh Garlic new shipper review.
Given that Ukraine seemed out of favor in the Fresh Garlic administrative review and Philippines is no longer on the China list, 2015 could see Romania work its way up the chart.

9. South Africa (1) (NEW ENTRY)

South Africa almost made this list last year as it was used in the preliminary stage of an Chlorinated Isocyanurates review, but in the final the Department opted for the Philippines.
However, the sun must be shining in South Africa as it was the primary surrogate for the recently completed solar investigation Certain Crystalline Silicon Photovoltaic Products.

New Lists for 2015

As 2015 begins, the U.S. Department of Commerce has published its new list of surrogate countries in several China antidumping cases (see one below), based on the 2013 World Bank GNI data released in December 2014. Two new countries – Romania and Ukraine – were placed on the list while Colombia and Indonesia were dropped. Ukraine is returning to the list after a short absence while Romania as mentioned above was used in the Fresh Garlic new shipper review last year.

The power rankings for 2014 above show that Commerce did not use Colombia as a primary surrogate country in the last year, so it is not surprising that it would drop off the list in favor of Romania or Ukraine which have been used in recent cases.

The elimination of Indonesia is akin to the dropping of the Philippines last year. As shown above, both Indonesia and the Philippines were a popular choices in China cases in 2014. Looking ahead to 2015, Indonesia has been used again in a Frozen Fish Fillets from Vietnam final just this month, so its place in the power rankings table is secure. It is just a matter of how often will Indonesia be used in 2015. In comparison to Indonesia and the Philippines, Romania and Ukraine, former NMEs themselves, have been used relatively few times. The continued appearance of Ecuador on the list is also puzzling since it has never been used in a case. To be honest, it is unclear if any other countries between the GNI per capita bookends of Ukraine and Romania are good data prospects. All the more reason why the elimination of Indonesia and even Philippines from the list is puzzling, as they have been proven to have good data availability and produce a large number of products.

If the Philippines experience from last year is anything to go by, not to mention the use of India in the 1-Hydroxyethylidene-1, 1-Diphosphonic Acid review and the use of Indonesia for Vietnam, the Department appears to be prepared to go off list on a case-by-case basis. So we should not be surprised to see the continued use of Indonesia and the Philippines (and even India), though a continued migration to Thailand or a shift to Eastern Europe may be on the cards as well. Indeed, Thailand may become the new “India” for China cases.

Surrogate Country List – China