What is an example of price dumping?

However, the benefits of dumping for China come at a cost for other countries. Domestic toy manufacturers in importing nations face increased competition from the cheaper Chinese toys, which can lead to a decline in their sales and profits. In some cases, this may even result in the closure of local toy factories and job losses.

The phenomenon of dumping in the global market is often exemplified by the export of toys. China, a major producer of toys, illustrates this concept vividly. When China manufactures a surplus of toys, it seeks to offload this inventory by exporting them to other countries.

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The key aspect of dumping lies in the pricing strategy employed. Instead of selling the toys at market prices, which are determined by supply and demand forces, China chooses to sell them at prices below their fair market value. This decision is driven by various economic and strategic considerations.

The practice of selling below-market prices allows China to gain a competitive edge in the international market. By offering toys at more attractive prices, it can attract buyers who might otherwise opt for locally produced or sourced toys. This, in turn, boosts China's exports and strengthens its position as a dominant player in the global toy industry.