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In a bid to avoid possible anti-dumping charges by the U.S. and other countries, Xinyi Group Co. Ltd., a major Chinese

auto glass

maker, has set up a factory in Hong Kong, bucking the decades-long drift of manufacturers from the territory to the mainland.

"The move is part of our global strategy to increase the number of our production origins," said Simon Li, spokesman for Xinyi Group, which owns the biggest float glass workshop in mainland China and exports 70 percent of its goods. "A second production origin can give our clients a choice to avoid possible interruptions in supply while we deal with anti-dumping measures," he added.

Last year Xinyi and several mainland China automobile glass makers lost an anti-dumping suit in the U.S., which started imposing anti-dumping tariffs of 3.71 percent to 124.5 percent on replacement glass windshields from China from last April.

The anti-dumping petition was filed by U.S.

auto glass

makers Apogee Enterprises Inc., PPG Industries Inc. and privately held Safelite Glass Corp.

"The tariff increases our costs and creates uncertainties," Li said, adding that the duty was subject to change each year. Xinyi and three other Chinese windshield makers also battled dumping charges by foreign competitors in Canada last year but won the case.

The Hong Kong factory, which employs 80 people and is aiming to double its payroll, began commercial in the first week of January. It is the first windshield maker in the territory with investment of $HK120 million ($15.4 million) and annual production capacity of 800,000 units.

The Hong Kong plant will help Xinyi boost annual production of windshields to about three million by 2004, or five percent of the world's consumption, from two million last year, the company said.

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