U.S.-China Trade Concerns Highlighted In Report To Congress

by King & Spalding
Contact

[author: T. Augustine Lo]

On November 14, 2012, the U.S.-China Economic and Security Review Commission (“USCC”) released its annual report to Congress on developments in both bilateral trade relations with the People’s Republic of China (“China”) and security-related concerns. In its transmittal letter to Congress, the USCC highlights several areas of trade-related issues, namely, the continuing relocation of manufacturing capacity from the U.S. to China; inadequate disclosures by Chinese enterprises that seek access to U.S. capital markets; inadequate protection of intellectual property in China and technological transfers to China; and China’s noncompliance with its obligations under the World Trade Organization (“WTO”). The USCC presents 32 recommendations to Congress to address the economic and security concerns discussed in the report.

The USCC recommends that “Congress examine the access of small- and medium-sized enterprises to the remedies contained in the U.S. antidumping and countervailing duty laws” and consider providing state and local governments with standing under those statutes. The report also recommends the enactment of “legislation that would provide a private right of action for domestic producers who suffer injury from antidumping and countervailing duty violations” by Chinese state-owned enterprises that operate in the U.S. In addition, the USCC suggests closer inspection of inbound Chinese investments in the U.S.

With regard to the report’s analysis, the USCC discusses in detail the continuing trade tensions between the U.S. and China. The USCC points to the persistent trade deficit with China, which continued its upward trajectory to reach $295.4 billion in 2011. The report also indicates that U.S. exports to China increased 13.1 percent from 2010 to 2011, reaching $103.9 billion in value. The report notes that, while China is aware of the need to rebalance its economic policies toward increased domestic consumption to reduce reliance on export-led growth, China is reluctant to change policies in view of its weakening economic growth.

The USCC finds that U.S. companies continue to experience difficulties in accessing the Chinese market because of China’s restriction of inbound foreign investments and rules that impede foreign competition. To address these obstacles, the U.S. brought several cases against China in recent years in the WTO. For instance, China prevented foreign companies from entering the Chinese market for electronic payments, effectively granting a monopoly to a national champion. The U.S. successfully initiated a case in the WTO, which resulted in a panel decision that ruled against the Chinese measures. China also has used its trade remedy regime to impede U.S. competitors.

The USCC also examines the implications of China’s industrial and technological policies in its Twelfth Five-Year Plan covering 2011 to 2015. Under these policies, Chinese central authorities emphasize the development of national champions in designated industries, governmental support for these industries to expand their market shares overseas, and acquisition of foreign technology to manufacture higher-valued products. To implement these plans, China provides generous subsidies and preferential lending that favor state-owned and state-controlled enterprises. The U.S. Department of Commerce has determined that similar subsidies provided to Chinese manufacturers were countervailable. In those cases, Commerce provided relief to U.S. industries that brought successful cases.

With respect to China’s official emphasis on technological innovation, the report notes that the lack of financing options for smaller start-ups and inadequate protection of intellectual property impede the development of indigenous innovation. The USCC is concerned that China will resort to “technological mercantilism” by both forcing foreign investors to transfer technology and by engaging in industrial espionage.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding
Contact
more
less

King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!