Comparison Research on Anti-dumping Duty Rates between Administrative Review and Welfare Maximization under Dynamic Game of Perfect Information

IntroductionAs the membership,the trade policy of China has tobe consistent with the regulations of WTO,therefore theduty rate of China will be falling down, and many NTBswill be abolished. Hence , we could not protect infantindustries with duty or NTBs when faced with dumpingactivities fromforeign fir ms . We can only protect theminvirtue of the Anti-dumping regulations of WTO.Because ofAnti-dumping to our commodities in many countries , theamount of China s export decreases at least10…

Comparison Research on Anti-dumping Duty Rates between Administrative Review and Welfare Maximization under Dynamic Game of Perfect Information

Using economics and game theory, two kinds of models have been proposed in this paper under the assumption that foreign and domestic firms behave under the condition of dynamic game of perfect information. One model is for calculating Anti-dumping rate which is obtained according to current regulations of Anti-dumping, but it is not optimal. The other is an optimal model of Anti-dumping which is obtained according to the maximum principle of domestic social welfare. Then, through the comparison of this two models in detail, several shortages have been revealed about Anti-dumping rate model based on current regulations of Anti-dumping. Finally, a suggestion is indicated that WTO and China should use the optimal model to calculate Antidumping rate.