Restriction of US high-tech exports to China remains contentious issue

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The United States still bans high-tech exports to China. [China Daily]

The United States still bans high-tech exports to China. [File photo]

As the United States seeks to promote trade and investment, it's unclear whether it intends to ease restrictions on high-technology exports to China.

During his visit to the US a week ago, Vice-President Xi Jinping repeatedly urged the US to ease those restrictions, saying that such a move would be an effective way to rebalance bilateral trade and create opportunities for US businesses.

Hans Klemm, US senior official for APEC ambassador, said on Wednesday that he was aware that the topic was discussed.

"Our export control regime is under constant review. As technological developments and the world environment permit, we'll make adjustments," Klemm said on Wednesday during a panel discussion on US economic engagement with Asia, part of the two-day Global Business Conference hosted by the State Department.

He didn't have any specific announcement regarding the results of Xi's visit.

Klemm noted that top US officials, including President Barack Obama, have said that Xi's visit was constructive and had helped resolve some outstanding issues.

Discussing concerns in China that US involvement in the Trans-Pacific Partnership was intended to contain China, Klemm said that participation in the partnership was open to any APEC member, though the threshold for entering the free-trade agreement was high.

David Carden, US ambassador to ASEAN, noted that the US has been involved with the TPP for some years, so it was "a mistaken notion" that it had anything to do with containing China's economic rise.

However, at a meeting at the Americas Society in New York last week, former US commerce secretary Carlos Gutierrez, now vice-chairman of the institutional clients group at Citigroup Inc, suggested the US use the TPP against China.

Jagdish Bhagwati, a professor and economist at Columbia University, has criticized the partnership. In an opinion piece published last month, he described the TPP as "a political response to China's new aggressiveness, built therefore in a spirit of confrontation and containment, not of cooperation".

Bhagwati, an advocate for free trade, has claimed that the US has purposely included numerous agendas unrelated to trade, such as labor standards and restraints on the use of capital account controls, to preclude China's rise.

Klemm also noted that the Trade Enforcement Unit, announced by Obama in his State of the Union address last month, was a reorganization of work that has been spread across a number of government agencies in support of US exports, such as export financing and negotiations of new agreements - not a move targeting China.

"I would not suggest these measures are undertaken to prepare the US to enter into a trade war with China or any other countries," he said.

Obama mentioned China while announcing the establishment of the enforcement unit. Many analysts believe that Obama's move is an election-year response to Republican presidential hopeful Mitt Romney's claim that Obama has been soft on China.

Speaking on Tuesday at the opening of the Global Business Conference, Secretary of State Hillary Clinton mentioned that the Trade Enforcement Unit was established to go after unfair trading practices.

She said the administration had brought trade cases against China at nearly twice the rate of the previous administration.

Clinton suggested the US government should play a bigger role in the economy, though Republicans have always resisted such a notion.

"We have worked to position ourselves to lead in a changing world where security is shaped in financial markets and on factory floors, as well as in diplomatic negotiations and on the battlefield," Clinton said.

"That's why more than 1,000 economic officers on six continents are working with American companies, chambers of commerce, local businesses and local and national governments to open markets and find new customers.

"Our power in the 21st century depends not just on the size of our military, but also on what we grow, how well we innovate, what we make and how effective we sell."

Clinton added: "Rising powers like China, India, and Brazil understand this as well, and we can't sit on the sidelines while they put economics at the center of their foreign policies."