Recently China has alleged Australian 'dumping' wines in its market and the Chinese government is conducting an investigation into this matter.
Discuss alternative methods the Chinese authority might use to improve that Australian wines have been dumped in China.
Dumping means to sell a product in foreign market at a price less than the cost of production basically below the average cost and above marginal cost of production.This is done mainly to get rid of surplus products and dominate the foreign market as this will crush the rivals existing in the market. The same is applied by Australian wines in Chinese market. China is finding alternatives to improve this situation. China did anti dumping investigation against Australian wines exports. This rule stops the producers from selling anything less than the market value. Using this tool a tariff has been imposed which causes the price of Australian wine to be thrice of that of Chinese wine so basically the wine will be effectively get excluded from Chinese market over time.
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