No winners in U.S. hi-tech export controls

14:18, May 12, 2011      

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The United States has launched a number of trade remedy measures against China over recent years while restricting hi-tech exports to China through export controls, and both policies have negatively affected the development of bilateral trade. Industry insiders generally believe that the enormous scale of trade between China and the United States, the differences in their development stages as well as complementary economic structures form a foundation for the stable development of bilateral economic and trade ties. Both sides should make unremitting efforts to further develop mutually beneficial and win-win economic and trade ties.

'Export controls' cause trade imbalance

In fact, the root cause for the U.S. trade barrier is China's trade surplus against the United States. The export controls established by the United States have restricted hi-tech exports to China and are undoubtedly a key cause behind China's trade surplus with the United States.

Data from the Ministry of Commerce (MOFCOM) shows that China's import and export value reached up to 3 trillion U.S. dollars in 2010, with a trade surplus of 183 billion U.S. dollars, including 181 billion U.S. dollars of trade surplus with the United States. This means that 99 percent of China's trade surplus came from the trade with the United States, while China's trade surplus with other countries was close to zero.

Chen Deming, minister of MOFCOM, said that China has focused more and more on boosting import from the United States over the past two years, which has not only realistically improved the trade ties between the two countries but also showed deep sincerity.

Increasing hi-tech exports to China will be beneficial to the United States, China and even the entire world. Sun Fei, head of the Financial Investment Committee under the China Association for Promoting International Economic and Technical Cooperation, said that hi-tech products become outdated quickly in an increasingly informationized world. Even if the United States refuses to export certain technology to China, China can still manage to obtain it from other countries or to develop more advanced technology by itself. The United States should lift restrictions on exports of hi-tech products to China as long as the exports do not impair its national security. Sun noted that the U.S. restrictions on high-tech exports have been a main contributor to its trade deficit with China in recent years.

Dispelling prejudice, misconceptions

Sun Zhe, director of the Center for China-U.S. Relations at Tsinghua University, said the current U.S. administration has imposed restrictions on the exports of hi-tech products for civilian use. After taking office, U.S. President Barack Obama streamlined the procedures for exporting civilian hi-tech products, integrated and optimized different governmental agencies in charge of such exports, which slashed the number of hi-tech products subject to export controls, in order to boost exports. However, these changes did not apply to China, meaning that high-tech exports to China still follow old laws and regulations. In fact, multinational corporations hold many hi-tech patents in the United States. To export civilian high-tech products, these corporations must first apply to the U.S. government for approval. Furthermore, they have prejudice and misconceptions about exporting high-tech products to China.

Imposing restrictions on high-tech exports will lead to missed opportunities

Expanding imports is a long-term strategy of China. As the world's largest developing country, China has become the fastest growing major export market for the United States, the world's largest developed country, for nine consecutive years. U.S. exports increased 2 percent in 2010 and its exports to China increased 50 percent. The Center of Forecasting Science under the Chinese Academy of Sciences predicted that the China-U.S. trade volume will exceed 450 billion U.S. dollars in 2011 and the growth rate of U.S. exports to China will exceed 18 percent. Experts said that the United States should release related policies to further strengthen the mutually beneficial cooperation partnership with China in order to benefit the people of the two countries even more.

Sun said that China currently needs to introduce a large number of advanced civilian technologies and equipment, and urgently needs advanced technologies in clean energy, energy conservation, alternative energy and environmental protection. It is a noteworthy phenomenon that China recently made astounding advances in the research and development of various civilian advanced technologies, such as large civil aircraft, nuclear power and super computers for agro-meteorological sounding. The "latecomer effect" of China's technology is obvious.

Therefore, the United States should understand that it will miss opportunities if it limits high-tech exports. Actually, U.S. companies will be able to occupy a larger share of China's emerging market as long as the U.S. government lifts restrictions on civilian high-tech exports to China.

Jing Naiquan, associate professor with Zhejiang University, said China should stick to the strategy of driving economic transformation by high technology and step up protection of intellectual properties. This is a huge market opportunity for the United States.

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