In: Economics
European Union (EU) was the largest wine exporter in 2013 and EU subsidized wine export. It is safe to assume that EU’s policy on wine would affect the world price of wine.
only answer Q4, explain pls
The majority of foreign wine in Chinese market is imported from EU. However it's a cause for dynamically growing economy, GDP and plays an important role in social and business life but Chinese people are not traditional wine drinker and don't know much about wine culture.
Majority of wine consumers in chinC are young people of the age between 30-45 years among which 70% are men and the rest are women. Therefore China needs to take important disciplinary action against the dumping of EU wine in China.
Anti dumping probe is a protectionist tariff that a domestic government imposes on foreign imports in case it believes that the foreign imports are priced below than the fair market value.
According to WTO's anti dumping agreement:
a. An economy can levy tariff on imports bring it's price somewhere close to the fair market value or
b. Can stop certain imports on an urgent basis for the sake of it's economy
c. And can also go through WTO's mechanism for settling of disputes in case required.
Here, in my opinion the Chinese government should go with the decision to levy tariff on imports of EU wine so that it can be sold there on fair price and can manage dumping in this way.