(40) On 5 May 2022, the Commission informed by a second note (‘the Second Note’) interested parties on the relevant sources it intended to use for the determination of the normal value. In the Second note, the Commission identified Malaysia as the appropriate representative country and it also informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on data of the company Ajinomoto (Malaysia) Berhad (‘Ajinomoto Malaysia’), a manufacturer of food, seasoning and synthetic sweeteners in Malaysia. No comments were received.
3.1.3.
Normal value
(41) According to Article 2(1) of the basic Regulation, ‘the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’.
(42) However, according to Article 2(6a)(a) of the basic Regulation, ‘in case it is determined […] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks’, and ‘shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits’.
(43) As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC and the Chinese producers, the application of Article 2(6a) of the basic Regulation was appropriate.
3.1.3.1. Existence of significant distortions
(44) In the recent investigation concerning acesulfame potassium (17) originating in the PRC, the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present in the chemical and petrochemical sectors in the PRC. The Commission concluded in that investigation that, based on the evidence available, the application of Article 2(6a) of the basic Regulation was also appropriate.
(45) In that investigation, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principles (18).
(46) In particular, in the acesulfame potassium investigation the Commission concluded that a substantial degree of ownership by the GOC persisted in the sense of Article 2(6a)(b), first indent of the basic Regulation (19).
(47) Furthermore, the Commission established that the GOC was also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation (20).
(48) The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs, have an additional distorting effect on the market. The system of planning in the PRC also results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces (21).
(49) Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in the PRC (22).
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