Sino-US relations

Calls in US for toolkit to hammer out China ‘trade bias’

AmCham calls on Washington to come up with new ways to counter heavy hand of government

PUBLISHED : Friday, 09 June, 2017, 8:33am
UPDATED : Thursday, 06 July, 2017, 11:31pm

A top US business group in China is lobbying Washington to take Beijing to task over what it says is official industrial discrimination and market distortion.

William Zarit, chairman of the American Chamber of Commerce in China, said there was a move in Washington to develop a box of tools to address investment inequalities and Chinese policies that favour local industry.

China launched its Made in China 2025 push two years ago to turn the country into a champion of high technology, innovation and advanced manufacturing.

Zarit said the policy was supported by the “heavy hand of the government” in the form of subsidies, preferential loans and forced technology transfer. Those approaches could distort markets, he said.

In Washington last month, chamber officials put their case to legislators and officials including US Treasury Secretary Steven Mnuchin and Peter Navarro, ­who is an economic ­adviser to the ­US president.

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“One point we do make [during the talks] is that we recommend that anything that’s done to address the discriminatory industrial policies not be done through the Committee of Foreign investment in the United States,” he said.

“We feel we need something that is more transparent and more directly applicable to those issues, not in the national security, perhaps more in the national economic security area.”

China and the United States reached a 10-point initial deal last month as part of efforts to address the US’ trade deficit with China. But observers said the deal lacked depth.

“There is a sense in Washington that we do need to look at a toolbox, and perhaps to bring it out, take some of the tools and work on the areas that we don’t feel fairness and reciprocal treatment,” Zarit said.

He added that those tools could include tariffs.

“Our economic relations should be based on fairness and reciprocal treatment,” Zarit said.

There has been discussion in the US on how to step up reviews of Chinese investment, which has become more targeted. One option is to expand the scope of the foreign investment committee to core US industries.

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Zarit said Navarro wanted “something specific in terms of the toolbox” but was “quite frustrated” with the chamber as it did not offer him any suggestions.

Zarit said a strong bilateral investment treaty to open market access and reduce unofficial trade barriers in China would help address many of the issues.

However, the talks are on hold there is no sign that a major breakthrough would be achieved until after the Communist Party’s 19th national congress due this autumn.