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Trade war

China probes Fanuc and 9 other foreign factory automation players

Charges of dumping seen as shield for homegrown peers shut out of US by tariffs

Fanuc is one of five Japanese companies targeted by the investigation, which has come amid an escalating trade dispute between Washington and Beijing that has bruised China's machine tool industry.     © Reuters

BEIJING -- China's Ministry of Commerce has begun an investigation into alleged dumping of precision machinery by Fanuc and four other Japanese companies, Nikkei has learned.

The probe began following a request from Beijing Jingdiao Group and two other Chinese machine tool makers that make products for smartphone parts. The five Japanese companies targeted also include Okuma, Brother Industries, Yamazaki Mazak and Jtekt. The investigation is also believed to cover five Taiwanese companies in factory automation hardware and 10 Chinese trading houses.

The move is likely aimed at protecting domestic competitors, whose earnings have been sapped by the U.S.-China trade war. Precision machine tools are considered a core field under the Made in China 2025 initiative, a program led by President Xi Jinping to modernize the country's industry.

The inquiry will be wrapped up by October 2019, after which tariffs or other measures will be imposed should the authorities conclude that these companies engaged in dumping.

Fanuc has denied any wrongdoing. "We believe the claims of dumping are untrue and will respond carefully," the company said. Japan's Ministry of Economy, Trade and Industry is working to gather information.

The three Chinese machine tool makers that called for the probe not only sell their products domestically but also export them from plants in the U.S. There are suspicions that the trio requested the investigation because of pressure to increase sales at home now that machine tools are subject to tariffs in both markets because of the trade war.

Japan's machine tool exports totaled 786.2 billion yen ($6.94 billion) in 2017, according to the Japan Machine Tool Builders' Association. That accounts for about 1% of the country's roughly 78 trillion yen in exports last year. China is a key market for Japanese machine tool makers, with about 30% of those exports shipped to the country.

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