U.S. proposals to expand licence requirements for its high technology companies to export to China will stifle business and increase uncertainty over the state of bilateral trade, Chinese Ministry of Commerce spokesman Chong Quan said on Wednesday.
If approved, the rule proposed by the U.S. Department of Commerce and the Bureau of Industry and Security in July, would set "unreasonable obstacles" to normal bilateral trade and harm the interests of firms in both countries, Chong said.
"We hope the U.S. will take China's concerns into serious consideration and take constructive measures to facilitate the trade of high-tech products. It will not only alleviate current trade imbalance, but also secure a healthy growth," Chong said.
Citing the U.S.-China High Technology and Strategic Trade Working Group under the Joint Conference for Commerce and Trade, he said China and the U.S. had established positive collaborative mechanisms in recent years.
"We hope the good momentum was not broken by the new rule," he said.
Although U.S. exports to China grew an average of 22 percent annually since China joined the World Trade Organization in December 2001, the trade imbalance between China and the U.S. remains a pressing issue.
Over the past five decades, the United States had seen its trade deficits with Europe, Japan and China successively soar, reflecting the change in America's major trade partners, said Professor Zhang Hanlin, of the University of International Business and Economics.
It also underscored the necessity for U.S. 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 State's comparative advantage in new high-tech products is obvious. If U.S. keeps adding new export controls, the interests of domestic companies will be impaired as much as those of Chinese importers," Zhang said.
The proposed rule, drawn up to prevent US-made high-tech products contributing to China's military modernization, requires licenses for the export of many items not currently controlled for export to China.
It also requires exporters to obtain an import or End-User Certificate from China's Ministry of Commerce for all exports of controlled goods and technologies that exceed a total value of 5,000 U.S. dollars. In addition, a license is compulsory for all computer exports to China regardless of value.
Given the broad impact of the rule, the Bureau of Industry and Security has asked U.S. companies to submit opinions by November.
Source: China View