US urged to ease ex­ports ban

Re­claim­ing 10 per­cent im­port share by 2015 the tar­get: coun­cil re­port

China Daily (Hong Kong) - - FRONT PAGE - By MICHAEL BARRIS in New York and LI JI­ABAO in Bei­jing

Chi­nese ex­perts are urg­ing the United States to loosen re­stric­tions on high- tech ex­ports to China to bal­ance bi­lat­eral trade and spur the US eco­nomic re­cov­ery.

The call comes as the US has pledged to work hard to ex­pand its ship­ments to China and to re­claim 10 per­cent of China’s to­tal im­ports by 2015.

Al­though China re­mained the US’ third- largest ex­port mar­ket in 2012, buy­ing goods from the US worth $109 bil­lion, Wash­ing­ton must fight harder to in­crease its share of that to­tal, the US-China Busi­ness Coun­cil said in two re­ports on Thurs­day.

From 2003 to 2012, US ex­ports to China rose by 294 per­cent, up nearly $81 bil­lion. But the US share in China’s to­tal im­ports has fallen to 7 per­cent from 10 per­cent in 2000 and it “sig­nif­i­cantly” trails the Euro­pean Union, Ja­pan and South Korea in ex­ports to the coun­try.

Chi­nese trade ex­perts at­tribute the drop to Wash­ing­ton’s re­stric­tions on high-tech ex­ports to China. “The key prob­lem is that the US has com­pet­i­tive­ness in high-tech prod­ucts but re­stricted the ex­ports to China, which forced China to di­ver­sify its im­ports from the EU, South Korea and other sources,” said Wang Jun, an ex­pert with the China Cen­ter for In­ter­na­tional Eco­nomic Ex­changes.

“The US should re­lax its guard against China. Eas­ing the ex­port re­stric­tion will not only bal­ance bi­lat­eral trade but also boost the US eco­nomic re­cov­ery.”

Long Guo­qiang, di­rec­tor of for­eign eco­nomic re­la­tions at the State Coun­cil De­vel­op­ment Re­search Cen­ter, agreed, say­ing that be­sides the re­stric­tions on ex­ports China has seen a change in its do­mes­tic con­sump­tion de­mand in the past decade.

In that time, China has wit­nessed a rapid rise in im­ports of pri­mary com­modi­ties, while the US has strength­ened ex­ports of agri­cul­tural and high-tech prod­ucts, along with chem­i­cals, to China, he added.

Con­strained US ex­ports to China and China’s ro­bust ex­ports to the US have re­sulted in a large trade sur­plus for China, which rose 8.5 per­cent year-on-year to $218.92 bil­lion in 2012.

At the same time, Wash­ing­ton has con­tin­ued to ac­cuse Bei­jing of ma­nip­u­lat­ing the yuan.

Ad­dress­ing the US’ abil­ity to com­pete with other coun­tries on ex­ports to China, the re­port on US Con­gres­sional dis­trict ex­ports to the coun­try said that China acts as a pri­mary pro­cess­ing area in East Asian sup­ply chains routed through Ja­pan and South Korea. This re­la­tion­ship ac­counts for strong im­ports from those coun­tries, it added. But it said that China’s im­ports from the Euro­pean Union, which “far outpace those from the United States”, pro­vide a more use­ful bench­mark for com­par­ing US ex­port com­pet­i­tive­ness in China.

The busi­ness coun­cil’s an­nual re­port said the US could in­crease its sales and global com­pet­i­tive­ness while pro­vid­ing China with in­no­va­tive prod­ucts and ser­vices to re­gain the 10 per­cent im­port share by 2015.

“As its econ­omy and mid­dle class con­tinue to ex­pand, China will con­tinue to play a sig­nif­i­cant role as an ex­port mar­ket for a wide se­lec­tion of US goods,” the re­port said.

It also said that US ex­ports to China “re­main a bright spot for US com­pa­nies”. Al­though an­nual growth in US ex­ports to China slowed to 6.5 per­cent last year due to China’s slow­ing econ­omy, an­nual aver­age growth over the past decade was nearly 17 per­cent, ac­cord­ing to the re­port.

“Strength­en­ing ex­ports to China will greatly ben­e­fit the US eco­nomic re­cov­ery, as China is not only a lead­ing ex­port mar­ket for the US but also the fastest grow­ing one,” Long said, call­ing for the es­tab­lish­ment of a China-US free trade agree­ment.

“If the US re­ally wants to gain from the Chi­nese mar­ket, the strate­gic move is to launch a bi­lat­eral FTA,” he said.

Wang said such an agree­ment be­tween the two coun­tries will re­move bar­ri­ers in trade and in­vest­ment.

Char­lie Welsh, edi­tor-in-chief of XportRe­porter, an on­line busi­ness-in­for­ma­tion jour­nal that cov­ers the ex­port mar­ket, said the coun­cil’s re­port un­der­lines how es­sen­tial it is that more US com­pa­nies look to faster-grow­ing for­eign mar­kets like China for growth op­por­tu­ni­ties.

“While ab­so­lute num­bers look im­pres­sive, the fact re­mains that US com­pa­nies, par­tic­u­larly in the mid­dle mar­ket, con­tinue to let their lunch get eaten by their more proac­tive peers in Europe, Ja­pan and else­where,” Welsh told China Daily.

“Amer­i­can com­pa­nies re­main a sta­tis­ti­cal anom­aly in­so­far as they, un­like other ad­vanced economies, do not look to for­eign mar­kets as a sub­sti­tute for lower do­mes­tic growth. That is why the US’ share of im­ports into China has fallen to 7 per­cent from 10 per­cent in 2000,” he said.

The busi­ness coun­cil’s re­port on US ex­ports to China by state shows that Cal­i­for­nia led last year, with ex­ports worth $13.6 bil­lion, a 156 per­cent rise from 2003 to 2012.

It was fol­lowed by Texas, with ex­ports worth $10.1 bil­lion and growth of 229 per­cent. The third-largest state ex­porter was Wash­ing­ton, with $7.9 bil­lion in ex­ports and growth of 239 per­cent.

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