''Small businessmen (small entrepreneurs) from India frequently travel to China and source cheap goods from small rural manufacturers (there). They then bring such goods to the Indian market. We don't have any regulation to prevent this practice," China's consul-general Mao Sewei told reporters on the sidelines of a meeting at the Bengal National Chamber of Commerce and Industry on Friday.
Such Chinese goods imported to India were of very poor quality, he admitted, saying that "even people in China do not buy goods of such poor quality. Chinese goods are sold all over the world and enjoy goodwill everywhere."
Mao, however, denied that China was resorting to dumping.
"Exports, which contributed 40 per cent of China's GDP over the last few years, had seen a steady decline since last October owing to the meltdown. As a result, the economic growth slowed down to 6.8 per cent. Does this mean that we are resorting to dumping?" he asked.
To a question, he said China did not have enough oil and gas reserves for exports to India.
"We are, in fact, negotiating with other countries for import of oil and gas," he said.
Quoting the World Bank reports, he said China's economy was likely to bottom out by mid-2009 and will fully recover by 2010.
According to the World Trade Organisation (WTO), China was the most popular target for new anti-dumping complaints.
In this latest case, the US steelmakers allege that China dumped tubular steel products used to make drilling equipment for markets such as mining and energy.
The European Commission announced on 8 April that it would impose anti-dumping duties on Chinese seamless steel pipe.
The number of anti-dumping actions being filed against China by other developing nations is also increasing. Many countries including Turkey, Argentina, Brazil and Colombia have filed several anti-dumping complaints about China.
China is now aggressively expanding into these markets, meeting resistance from governments trying to protect their domestic industries.
India also had several issues with China. From October 2008 to February 2009, India has launched 17 trade remedy probes, including those of anti-dumping and anti-subsidy, against Chinese products, covering industrial salt, steel, auto parts, coal products, porcelain products, textile and rubber products, which, according Chinese ministry of commerce means a total loss of more than $1.5 billion for the Chinese producers and traders.
However, easing the tension between the two Asian trading giants, India on 2 March lifted a month old ban on Chinese toys. (See: India lifts ban on Chinese toys).
According to Chinese statistics, bilateral trade between India and China has attained a volume of $51.8 billion in 2008; so China has overtaken the United States as India's largest trade partner.
China has predicted that bilateral trade between the two could reach $100 billion dollars in less than 10 years.