US President Donald Trump’s administration yesterday slammed China on a range of trade issues from its chronic industrial overcapacity to forced technology transfers and long-standing bans on US beef and electronic payment services.
The annual trade barriers list from the Office of the US Trade Representative (USTR) sets up more areas of potential irritation for the first face-to-face meeting between Trump and his Chinese counterpart, Xi Jinping (習近平), in Florida next week.
USTR, controlled by the White House, said that Chinese government industrial policies and financial support for industries, such as steel and aluminum, have resulted in overproduction and a flood of exports that have distorted global markets and undermined competitive companies.
“While China has begun to take steps to address steel excess capacity, these steps have been inadequate to date and even fewer efforts have been taken by China in aluminum and other sectors,” USTR said in the report.
The report said that China is also using a series of cybersecurity restrictions as part of an apparent long-term goal to replace foreign information and communications technology products and services with locally produced versions.
USTR also accused China of using a range of measures to engineer the transfer of foreign technology to local firms. It said these include denying financial or regulatory approvals to companies using foreign-owned intellectual property or that do not conduct research or manufacture products in China.
“China also reportedly conditions foreign investment approvals on technology transfer to Chinese entities, mandates adverse licensing terms on foreign IP [intellectual property] licensors, uses anti-monopoly laws to extract technology on unreasonable terms and subsidizes acquisition of foreign high technology firms to bring technology to the Chinese parent companies,” it said.
Gaps in IP rights enforcement have allowed the misappropriation of foreign IP and trade secrets, both within and outside of China.
USTR also brought up long-standing complaints about online piracy of movies, books, music, video games and software in China, as well as a ban on US beef that has been in place since 2003.
It said delays in China’s approval process for agricultural products derived from biotechnology also worsened last year, hurting US corn exports.
The USTR released the list of trade irritants in 63 countries just after senior Trump trade officials announced an executive order to study the causes of US trade deficits.
Trump was to sign executive orders yesterday aimed at identifying abuses that are causing massive US trade deficits and clamping down on non-payment of anti-dumping and anti-subsidy duties on imports, US Secretary of Commerce Wilbur Ross said.
Ross said that currency misalignment was not the same as manipulation, and only the US Department of the Treasury could define currency manipulation.
However, he said in some cases, currencies can become misaligned from their traditional valuations unintentionally, citing the Mexican peso’s sharp decline late last year after Trump’s election.
Chinese Vice Minister of Foreign Affairs Zheng Zeguang (鄭澤光) yesterday acknowledged there was a trade imbalance, but said it was mostly due to differences in the two countries’ economic structures, adding that China had a trade deficit in services.
“China does not deliberately seek a trade surplus. We also have no intention of carrying out competitive currency devaluation to stimulate exports. This is not our policy,” Zheng told a briefing about the Xi-Trump meeting.
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