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US export controls cost firms trade opportunities in China

(Xinhua)
Updated: 2007-06-23 15:02

U.S. restrictions on high-technology exports to China were costing U.S. firms potential trade opportunities and putting them at a disadvantage, said Wang Qinhua, a senior official with China'sMinistry of Commerceon Friday.

"The controls have affected not only the number of products requiring export licenses, but also exports that do not require licenses," said Wang.

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"The U.S. side believes the rejected export licenses are a small fraction of U.S. exports to China, with a negligible effect on bilateral trade," said Wang. "But that's not the case."

China's hi-tech imports grew at an annual rate of 31 percent over the past six years, but the U.S. contributed 9.1 percent of China hi-tech imports in 2006, down from 18.3 percent in 2001.

In 2006, China imported machine tools worth 7.24 billion U.S. dollars, but only eight percent were from the U.S.

Meanwhile, six percent of China's integrated circuits imports and less than three percent of its semiconductor imports were from the U.S.

Wang said the new U.S. rules, which imposed licensing requirements on 31 export items to China for military use, had increased firms' operation costs and political risks and hindered the smooth development of Sino-U.S. hi-tech trade.

The Chinese government on June 19 criticized the U.S. for imposing the restrictions, saying they were inappropriate and against the cooperative spirit without fully consulting China and the U.S. would be responsible for the negative outcome.

The export control list announced by the U.S. Commerce Department on June 15 covers 20 product categories ranging from avionics to computer software.

It includes aircraft and aircraft engines, underwater cameras and propulsion systems, avionics and inertial navigation systems, certain composite materials, lasers, depleted uranium, and some telecommunications equipment.

The U.S. Commerce Department said these items could contribute to China's military modernization.