Plans by the US to expand license requirements for companies exporting high-tech goods to China would stifle business and increase uncertainties over bilateral trade, said the Ministry of Commerce yesterday.

 

If approved, the rule, proposed last month by the US Department of Commerce and the Bureau of Industry and Security, would pose "unreasonable obstacles" to trade and harm the interests of businesses in both countries, said Chong Quan, the ministry spokesman. 

 

He was referring to the proposed US rule on exports, particularly high-tech products, to China which would require licenses for many items not currently covered by such regulations. It would affect 47 categories of high-tech goods. 

 

The proposal would also require exporters to obtain an import or end-user certificate from China's Ministry of Commerce for all exports of controlled goods and technologies exceeding a total value of US$5,000. A license is compulsory for all computer exports to China regardless of value.

 

US Trade Representative Susan Schwab argued during her visit to Beijing, which ended on Tuesday, that the products affected by the new rules accounted for only a small proportion of Sino-US trade and wouldn't have a serious impact on business overall.  

 

However, Chong called on the US to revise its export control policies. "We hope the US will consider China's concerns seriously," he said. Easing restrictions on high-tech trade with China would help narrow the trade gap, which tops Washington's concerns in bilateral relations, added Chong.  

 

"We hope the US will take constructive measures to facilitate the trade of high-tech products," he said. "It will not only reduce the current trade imbalance but also secure healthy growth." 

 

Although US exports have grown on average by 22 percent annually since China joined the World Trade Organization in December 2001, the trade imbalance between the two countries remains a pressing issue.

 

Over the past five decades the US had seen big trade deficits, first with Europe, then Japan and now China reflecting the change in the country's major business partners, observed Professor Zhang Hanlin of the University of International Business and Economics. 

 

 

It also underscored the necessity for the US to narrow its deficit with China through more open trade in high-tech products, said Zhang.

 

"When it comes to the trade with China, the United States' comparative advantage in new high-tech products is obvious,” observed Zhang. “If it keeps adding new export controls, the interests of domestic companies will be impaired as much as those of Chinese importers."

 

(China Daily August 31, 2006)