A Ministry of Foreign Trade and Economic Co-operation investigation concluded that Korean makers of polyester had damaged Chinese producers by engaging in dumping practices. In future, the seven manufacturers named in the ruling must pay cash guarantee deposits on any polyester products they
export to China.
A report on China's polyester industry by Deutsche Bank, however, commented that these measures were unlikely to be of much assistance to the domestic industry. The report said that the total share of imported polyester in the Chinese market fell from 30 per cent in 1996 to 11 per cent in 2001. Instead, the main problem facing the industry is over-capacity. Domestic production has
risen by an average annual rate of 18 per cent since 1995, accelerating to 26 per cent yearon-
year in the first half of 2002.