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US policy impedes healthy trade relations
By Wen Dao (China Daily)
Updated: 2004-04-21 15:56

Despite Stanley Myers' efforts, US semiconductor equipment makers still have difficulties conducting business in China due to the US Government's strict export control policies.

Myers is a regular visitor to China, where his organization, the Semiconductor Equipment and Materials International (SEMI), holds an annual exhibition in the nation's economic hub of Shanghai.

But Myers is also a regular visitor to the world's fastest-growing semiconductor market because he is promoting the business of his organization's nearly 2,000 member companies.

Semiconductor equipment manufacturers are not the only US firms that suffer as a result of their government's export restrictions, which currently put their European and Japanese competitors at a distinct advantage.

US aviation and nuclear energy companies are also suffering from this policy.

US aviation and government technology provider Rockwell Collins Chairman Clayton Jones told China Daily the export policy has caused some problems for his firm.

"We'd like to see the US Government take a more retrospective look at some cases of the policies," said Jones, who is also a director of the General Aviation Manufacturers Association and a member of the Board of Governors of the Aerospace Industry Association.

This means that while ordinary US consumers are able to purchase more high-tech Chinese products, Chinese companies and people are denied the same access to such goods from the United States.

Shanghai-based Semiconductor Manufacturing International Corp (SMIC), the biggest of its kind in China, faced problems when it tried to import two sets of semiconductor equipment in 2001 from US equipment vendor Applied Materials, finding the export licence for one batch of equipment being suspended by the US Government.

SMIC finally gave the order to a Swedish company after several months of fruitless waiting.

While both France and Canada are playing active roles in the Dayawan nuclear power plant in South China and the Qinshan power project in East China, US nuclear power firms are being denied similar opportunities.

The US Government's tight export controls are believed to be the major cause of the trade deficit on the US side, according to Chinese experts.

According to China's customs, the nation's trade surplus with the United States reached US$58.6 billion last year.

"The US export control policy has increasingly worsened the trade balance situation," said Jin Canrong, a professor of international trade at Renmin University of China.

"While the US is accusing China of manipulating exchange rates to gain an 'unfair' trading advantage, its outdated export policy gives people every reason to doubt its seriousness in solving the trade imbalance."

A fellow expert at the Academy of Foreign Trade and International Co-operation under the Ministry of Commerce, who wished to remain anonymous, even predicted that the situation will be reversed, with the US having a surplus if Washington lifts its export controls.

"You can imagine what the situation will be, when the value of a Boeing jet equals 100 million jeans that Chinese companies export to the United States," he said.

But the situation has already started to change.

China released an administrative measure on export licenses for sensitive technologies and products such as nuclear, biotechnology, chemicals and missile technologies in December, to tighten its control of sensitive technologies and ease worries from countries like the United States that their technologies may be re-exported to other parts of the world by China.

The US Government is also making progress in solving the trade balance issue.

US Vice-President Dick Cheney visited Beijing from April 13 to 15, aiming to promote trade and economic co-operation between the two countries.

sHe said expanding co-operation would benefit both sides and expressed a willingness by the United States to work with China to solve problems on trade and economic ties.

In March, the US Government also said it would support a proposal from SEMI to remove most semiconductor test equipment from international export control requirements.

The proposal is likely to be implemented in 2005.

It was also reported that some US companies such as Westinghouse were interested in bidding for a four-reactor nuclear project worth as much as US$6 billion.

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