China President Hu Jintao USA State Visit January 19 - 21 2011 http://www.b2bchinadirect.com/hujintaousavisit.htm

  USCBC Special Report: Hu Jintao State Visit

 U.S. Free Trade Agreements

January 27 2011

US will lose business if export controls remain in place By Ding Qingfen

The United States will probably allow huge business opportunities to go to European Union (EU) countries and Japan if it refuses to rescind controls on exports to China as soon as possible, according to Chinese government officials. The comments came at a monthly forum on China-US Economic Relations held by the China Center for International Economic Exchanges (CCIEE) - a high-level business thinktank - on Wednesday.

Wei Jianguo, a former vice-minister of commerce, and now secretary-general of the CCIEE, urged the US to quickly reduce restrictions on high-tech exports to China in a bid to narrow the trade surplus, an issue that has become central to bilateral trade conflicts.

"The sooner the US does it (loosens the restrictions), the more leverage it will gain in the future and the more commercial benefits it will gain otherwise, the business opportunities (in terms of high-volume Chinese imports of high-tech products) will naturally slip away to other nations, including those in the EU and Japan," said Wei.

During the 3rd China-EU High-Level Economic and Trade Dialogue held in Beijing in December, the EU agreed to set up a working panel to examine boosting high-tech sales to China.

A meeting on the issue is expected to be held early this year, after the two sides reached a consensus on increasing cooperation on high-tech trade.

China has a large trade surplus with the US, which the US attributes to the yuan being undervalued.

China denies this, and says that the best way to promote Chinese imports is for the US to abandon its restrictions on high-tech exports.

The export of high-tech products to China, for both military and civilian use, has long been forbidden by the US despite repeated calls for change. During President Hu Jintao's four-day visit to Washington last week, China again made a proposal on the issue during the bilateral high-level meeting.

Although China signed a series of agreements on purchasing US goods worth as much as $45 billion, no progress was made on the issues of export controls.

"China and the US have been cooperating well, but US export controls are a big problem in bilateral economic relations," said Sun Zhenyu, the former Chinese ambassador to the World Trade Organization, at the forum.

"US exports to China would easily increase if such a restriction did not exist."

Some US companies have also agreed with that statment.

"The US government has to look at reducing controls, because erecting barriers cannot be the answer to US need to create jobs and prosperous growth," said Mark Norbom, president of General Electric China.

GE, the largest US industrial company by market value, announced a number of deals with Chinese groups last week that will create about 4,500 jobs in the US, including the formal signing of a joint venture agreement with the Aviation Industry Corporation of China to set up a 50-50 joint venture to provide avionics for the new Chinese C919 airliner.

January 29 2009

Buy America Program may destroy USA and Asia trade and business

The Honorable Daniel K. Inouye
United States Senate
722 Hart Senate Office Building
Washington, D.C. 20510-1102

The Honorable Daniel K. Akaka
United States Senate
141 Hart Senate Office Building
Washington, D.C. 20510-1102

Dear Senator Inouye and Senator Akaka:

You face an awesome responsibility as the Senate grapples with the stimulus package. That responsibility includes ensuring that Hawaii gets the maximum “bang for the buck” from projects to be financed and ensuring that Hawaii and the country are not engulfed by a downward spiral likely to be triggered by “Buy America” provisions that were inserted in the House version of the package.

I write to you as vice-chair of the Hawaii Pacific Export Council, a volunteer committee of business leaders in Hawaii, who are appointed by the U.S. Secretary of Commerce to provide their expertise to assist our Hawaii companies, mostly small businesses, to export their good as services overseas, thereby helping Hawaii's economy. Hawaii’s market is simply too small for many companies to thrive in these times, and we see more and more Hawaii companies trying to generate overseas sales to tide themselves over.

The stimulus package passed by the House of Representatives contains provisions calculated to prompt extreme reactions from the trading partners on which Hawaii depends. These include requirements that the steel and cement to be used on infrastructure projects financed by the package must be of U.S.-origin. This may sound attractive on the surface, but the provisions are fraught with unintended consequences. Perhaps intended to save U.S. jobs in the steel and cement industries, this will be done at the price of losing even more American jobs in the construction industries by raising the price of their inputs and creating supply bottlenecks that will slow down the hoped-for recovery. You can imagine how quickly Hawaii will get steel from the Mainland if the entire country is competing for American steel only.

Hawaii’s exports are likely to be disrupted as well. The European Union is already moving to prosecute the United States in the World Trade Organization should the Buy America provisions become law. France is already considering a Buy French policy to exclude our products. Our major markets in Asia are bound to take action to protect themselves - in a replay of the world’s reaction when the Smoot-Hawley Tariff was passed, exacerbating the Great Depression. Make Hawaii a leader in helping the world recover from this recession by voting against the Buy American provisions. Don’t let us lead the way to a downward spiral.

A copy of a letter is attached that has been sent to Senators Reid and McConnell, and to Representatives Pelosi and Boehner. The Hong Kong.China.Hawaii Chamber of Commerce (HKCHcc) strongly endorses this letter.

Sincerely,
Johnson W. K. Choi
President
Hong Kong.China.Hawaii Chamber of Commerce

January 22, 2009

The Honorable Nancy Pelosi                             The Honorable Harry Reid
Speaker Majority                                                 Leader
U.S. House of Representatives                         U.S. Senate
H-232, U.S. Capitol                                             S-221, U.S. Capitol
Washington, D.C. 20515                                    Washington, D.C. 20510

The Honorable John Boehner                             The Honorable Mitch McConnell
Republican Leader                                               Republican Leader
U.S. House of Representatives                           U.S. Senate
H-204, U.S. Capitol                                              S-230, U.S. Capitol
Washington, D.C. 20515                                     Washington, D.C. 20510

Dear Speaker Pelosi and Leaders Reid, Boehner, and McConnell:

The challenges facing the United States economy are far reaching, and we support the Administration’s and Congress’ efforts to create an economic stimulus package that will help American workers and companies to face them. One issue that we urge you to bear in mind as you prepare this legislation is the vitally important role that international markets play in sustaining U.S. jobs today and the role they will play in economic recovery. Without sales abroad and access to inputs, many U.S. workers would be out of a job. As a consequence, the undersigned associations, representing every major U.S. business sector, urge you to ensure that the economic stimulus package does not include trade-restrictive provisions – including counterproductive expansions of Buy American-type mandates – that would undermine the ability of American companies and workers to export goods and services made in the United States and thereby undercut the goals of this package.

U.S. law already imposes significant Buy American mandates on products purchased by the Federal government, as well as additional mandates for federally funded highway projects. These provisions generally require the use of American products except in specifically defined circumstances. As a result, there is no need to expand these provisions or create new ones.

Moreover, proposals to expand Buy American restrictions would have several major adverse consequences for the United States, U.S. industry and U.S. workers. In particular, the inclusion of such restrictive provisions in the economic stimulus legislation would:

Undermine America’s leadership in the global response to the worldwide financial crisis by turning our backs on the November 15, 2008 G-20 Joint Declaration commitment that “within the next 12 months, we will refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports.” We believe that any expansion of Buy American-type provisions in the economic stimulus legislation would be counter to that commitment and American leadership thus far.

Shut U.S. companies and their workers out of the economic stimulus programs being initiated around the world. Inclusion of new trade-restrictive proposals would send precisely the wrong signal to governments around the world that are undertaking their own economic stimulus programs. The list of countries moving forward with their own economic recovery programs – many of whom are major markets for American goods and services – is growing. Already, China, Germany, Great Britain, France, Australia, India and other countries have initiated or are preparing to initiate major new infrastructure and other stimulus projects. If the United States further restricts access to our market, these other countries will certainly follow our lead, shutting U.S. exporters and their workers out of hundreds of billions of dollars of new business, while propping up their own national champions to the detriment of the United States. At a time when American exports are one of the few bright spots of the U.S. economy and markets are weakening overseas, the U.S. Congress should be taking actions to promote U.S. exports, not undermine them.

Unnecessarily delay and undermine the economic stimulus goals of this legislation. Current provisions already require that supplies for public use in federally funded highway projects be manufactured in the United States substantially all from articles, material or supplies mined, produced, or manufactured in the United States. With such a huge infrastructure task ahead, adding additional restrictions will only delay the ability of projects to move forward, delay job creation and delay economic recovery.

Diminish competition and efficiency in the contracting process, which will result in lowering the quality and cost-effectiveness of our infrastructure improvements.

 Violate the United States’ international commitments, depending upon the actual proposal. The United States, through its membership in the World Trade Organization Government Procurement Agreement (GPA) and several bilateral and regional trade agreements, has guaranteed non-discriminatory access to the procurement markets of many of our largest trading partners. In return, the United States has agreed to provide non-discriminatory access to our own procurement markets for projects above certain dollar thresholds. The U.S. approach, crafted over successive Democratic and Republican Administrations, preserves many safeguards in our procurement rules for American goods and firms, including Buy American provisions for some projects, as well as small-business preferences. If the United States expands or enacts new Buy American-type provisions that abrogate U.S. GPA or our other trade agreement commitments, the United States and U.S. firms will face retaliatory sanctions in other markets and jeopardize our ability to open other foreign government procurement markets to U.S. goods and services.

We share your strong interest in promoting economic recovery for the United States and its workers and firms through a strong economic stimulus package. For all of the reasons set forth above, we strongly urge you to reject the expansion or creation of new Buy American-type provisions in the stimulus package because such provisions would undermine the economic recovery we all seek.

Respectfully,
Aerospace Industries Association
American Business Conference
American Council of Engineering Companies
Associated Builders and Contractors
The Associated General Contractors of America
The Association of Equipment Manufacturers
Business Roundtable
The Coalition for Government Procurement
Coalition of Service Industries
Emergency Committee for American Trade
The Information Technology Association of America
National Defense Industrial Association
National Foreign Trade Council
United States Council for International Business
U.S. Chamber of Commerce

December 17 2008

Services in the CEPA (Closer Economic Partnership Arrangement) spotlight 

Financial Secretary John Tsang and Vice-Minister of Commerce Jiang Zengwei sign Supplement V to the Hong Kong-Mainland Closer Economic Partnership Arrangement

Andrew Brandler, Hong Kong General Chamber of Commerce Chairman, welcomes the latest CEPA initiatives

Good news for Hong Kong-based businesses in the services sector. The latest phase of CEPA, the Closer Economic Partnership Arrangement between Hong Kong and the Chinese mainland, will bring with it more opportunities.

The newest additions to CEPA, signed in July, brings to 40 the number of services now covered by the free trade agreement, introduced in 2003. CEPA created 36,000 jobs and attracted more than US$642 million of investment into Hong Kong in its first three years. CEPA gives favorable trading and investment treatment to a range of Hong Kong-incorporated manufacturers and services through tariff exemptions and greater mainland access.

Overseas companies not based in Hong Kong can also take advantage of CEPA by outsourcing to, or partnering with, CEPA-qualified manufacturers or service providers in Hong Kong.

The latest phase, Supplement V, covers sectors such as tourism, accounting, medical and dental services, education, construction and related engineering. Two new sectors have been added: services related to mining, for oil and gas exploration; and associated scientific and technical consulting services for the prospecting and surveying of iron, manganese and copper in the mainland. Supplement V also introduces a mechanism for increased cooperation on branding, trademarks and e-commerce.

The new phase puts special focus on strengthening economic and trade cooperation between Hong Kong and the southern mainland province of Guangdong, making it easier for Hong Kong services providers to open businesses in the province. Among the new CEPA commitments, 25 will be initiated as pilot projects in Guangdong, a testing ground for the rest of the mainland.

Tangible benefits - Industry bodies have welcomed the latest signing. Hong Kong General Chamber of Commerce (HKGCC) Chairman Andrew Brandler said the agreement would bring tangible benefits to many Hong Kong companies and professionals as they expand their operations in the mainland. It would also foster growth in services, he said.

"For example, under the framework of Trade and Investment Facilitation, both parties will promote cooperation in electronic commerce. Under Trademark, they will set up a working team to encourage communication and cooperation in trademark registration, management and protection," said Mr Brandler. "In addition, Brand Cooperation between Hong Kong and the mainland is a new sector under CEPA Trade and Investment Facilitation. The chamber has been calling for these measures to be added to CEPA, so we are glad to see they have been included in the latest supplement."

HKGCC Chief Executive Officer Alex Fong said the services sectors covered were relevant to business needs. Commenting on a CEPA working mission that the chamber organized to Guangdong last year, Mr Fong said the cases observed there "helped to generate proposals for our CEPA wish list." Mr Fong was also pleased to see that the newly signed supplement contains 25 liberalization provisions between Guangdong and Hong Kong. "These should allow more Hong Kong enterprises to operate businesses in the province. At the same time, implementation of CEPA will be improved, which will help Hong Kong companies make use of their competitive edge there."

Faster and easier - The Hong Kong Institute of Certified Public Accountants said the new agreement would bring Hong Kong accountants more opportunities to practice in China.

"For the accounting profession, it means that Hong Kong certified public accountants (CPAs) need only pass the tax and law papers of the Chinese Institute of Certified Public Accountants' exam to become CICPA members. Mainland CPAs now only need to pass the taxation module and the final exam of the Hong Kong Institute of CPAs qualification program to become Hong Kong Institute of CPAs members," said Winnie CW Cheung, Chief Executive and Registrar of the Hong Kong Institute of CPAs.

"These exemptions make it faster and easier for accountants to qualify, or become licensed, in each market. And it's going to bring the two professions another step closer to full mutual recognition."

Chairman of the Federation of Hong Kong Industries Clement Chen said the agreement on trademark cooperation could encourage more Hong Kong companies to develop new products and build their own brands.

"The cooperation mechanism for intellectual property protection and branding will help encourage Hong Kong enterprises to invest in developing new products and branding. This will assist them in targeting the newly emerged middle class consumer market in the mainland," Mr Chen said. "The distribution sector will benefit from the liberalization measures of the new CEPA package. By allowing Hong Kong enterprises to operate on a wholly-owned basis in China, it will be easier for them to open up chain stores in the targeted cities, and to gradually set foot in the massive mainland domestic market."

CEPA Supplement V comes into effect 1 January 2009 http://www.tid.gov.hk/english/cepa/

October 4, 2007

New Rule Exempts Use By Dates From Four Types of Food

The Administrative Provisions on Food Labeling recently promulgated by the General Administration of Quality Supervision, Inspection and Quarantine will come into force on 1 September 2008. Under the new rule, use by dates will not be required for four types of food with an ethanol content of 10% or over. 

The new provisions govern the content and format of labels for food products and include a number of additional requirements, such as place of manufacture, name of repacker, warning message and minimum units for sale. Chinese explanations must be given if the food has been clinically proven to be harmful to special groups, has been treated with ionizing radiation or energy, is genetically modified (GM) or contains legal GM raw materials, and is required by law, regulations and national standards to show other explanations in Chinese. Food that uses words like "nourishing" and "strengthening" in their name or explanation must indicate the vitamin content and calories in its labeling.

The new rule requires that food labels clearly indicate the date of production and use by date. If the use by date has to do with storage, the special storage conditions should also be indicated. Alcoholic beverages, edible vinegar, edible salt and sugar in solid form that have an ethanol content of 10% or over, are exempted from use by dates. The dates should be indicated in a manner that complies with national standards or in the "year/month/date" format.

Seven types of content are prohibited from use on food labels, including expressed or implied claims that the product may be used for the prevention or treatment of diseases; expressed or implied claims that the product has health care functions when it is not a health care product; fraudulent or misleading ways of describing or introducing a type of food; and additional product notes that cannot be justified. Quality inspection departments will order violators to make rectification before a stipulated date. Those who fail to make rectifications after the due date will be fined up to Rmb10,000. Those who violate laws and regulations will be dealt with accordingly.

Aug 9, 2007

China spends $1b improving food, drug safety

China will spend more than $1 billion improving food and drug safety by 2010 and the regulator will be given stronger oversight powers, an official said on Wednesday.

State Food and Drug Administration spokeswoman Yan Jiangying said the government had earmarked 8.8 billion yuan (US$1.16 billion) for food and drug safety over the current Five Year Plan, which runs to 2010.

Part of this would be spent on a large, new laboratory, she said, adding this was the first time the spending figure had been made public. Yan did not provide a comparison for previous years.

"Once the Five Year Plan has been completed, the abilities and the base of the regulator will be substantially raised," Yan said. "There will be an enormous improvement in the system for guaranteeing food and drug safety for the public."

New rules would give the watchdog the power to seal factories and seize whatever materials they need when probing sub-standard goods, she added.

Yan said her department would also take the safety message nationwide, starting out in the enormous countryside, home to 60 percent of the 1.3 billion population.

"We will focus on rural food safety," Yan said.

A deputy agriculture minister admitted recently that the backward state of Chinese farming was a major obstacle to raising food safety.

State media said on Wednesday, the beginning of the one-year year countdown to the Beijing Olympics, the government would launch a campaign to crack down on the use of highly potent and poisonous pesticides which are banned but still in use.

Five pesticides were banned earlier this year, and the Agriculture Ministry was compiling a blacklist of companies still making them. As part of the government's food safety strategy, it will educate farmers how to properly use pesticides.

Aug 8, 2007

China New Health Food Policy Soon to Come Out

The State Administration of Industry and Commerce is currently drawing up a new set of standards for the examination of health food advertisements for promulgation in the second half of the year. Over 40 industry standards are also expected to come out before the end of the year. 

The Measures on the Administration of Health Food Registration have been in force for two years since their promulgation on 1 July 2005. During these two years, the measures have been amended from time to time and the industry's entry threshold has been raised. The Standards for the Examination of Health Food Advertisements being drawn up will subject health food advertisements to strict examination. Exaggerated advertisements will be banned while brand advertisements and public service advertisements will be encouraged.

The Regulations Governing the Naming of Health Food (Trial Implementation), promulgated on 14 June this year as a supplement to the Measures on the Administration of Health Food Registration, require that health food cannot be named after physical functions. Under this new regulation, the majority of health products need to change their names. The industry sees this as the beginning of the government's firm grip on the health food market.

As a matter of fact, the Measures on the Administration of Health Food Registration set higher market entry thresholds for the health food industry. These measures clearly point out that health food refers to "food that is good for a particular group of people with the function of improving physical condition, but is not meant for curing diseases and does not cause any acute, sub-acute or chronic harm to the human body." They also set higher technical requirements for the registration of health food.

As a result of the raising of entry thresholds, the percentage of health food passing examination dropped last year. In 2006, China approved 1,231 health food items and withheld approval for 182 items. The failure rate was 12.7%, an increase of 53% over the previous year.

(Information Source & Credit: Hong Kong Trade Development Council)