On the evening of the 29th, Beijing time, the White House once again changed its position and issued a statement saying that it will impose a 25% tariff on China’s US$50 billion products containing important industrial technologies according to the 301 investigation. The list will be announced on June 15. To implement export controls on relevant Chinese individuals and entities that acquire major technologies in the United States, and to adopt specific investment restrictions, it is planned to officially announce relevant measures by June 30, 2018. Unless China solves the problem of theft of US intellectual property, it will be implemented.
This is obviously inconsistent with the tone of the joint statement issued by China and the United States on May 19. At that time, senior officials from both China and the United States stated to the media that the two sides reached a consensus to stop the trade war.
However, the U.S. side believes that the previous agreement does not involve the U.S. investigation of Chinese intellectual property theft. U.S. Secretary of Commerce Ross planned to visit China from June 2 to 4 to further negotiate and implement the framework agreement. The White House has suddenly changed. In the face of the White House’s attitude of turning over faster than reading a book, the Chinese Ministry of Commerce’s spokesperson issued a statement late on the 29th to respond:
We were both surprised and surprised at the strategic statement issued by the White House. This is obviously contrary to the consensus reached between the two sides in Washington not long ago. Regardless of what the US has done, China has confidence and ability. We have the experience to safeguard the interests of the Chinese people and the country’s core interests. The Chinese side urges the United States to act in accordance with the spirit of the joint statement.
It is worth noting that, unlike Trump’s previously stressed trade deficit problem, this statement focuses on important industrial technologies, China-made 2025 and intellectual property rights. It can be said that the change of the White House on the 29th night means that China and the United States will A new round of game in the field of science and technology.
Analyst's Perspective: What impact does the $50 billion tariff have on the electronics industry?
In response to this US taxation statement, China Merchants Electronics analyst pointed out that the White House announced that it will impose a tax on the US$50 billion imported products from China. This was a continuation of the previous '301 investigation'. The White House’s official statement stated clearly: In article 301 of the annual trade law, the United States will impose a 25% tariff on US$50 billion in products'. Therefore, we determine the final tariff list, which can partially refer to the “Proposed Tariff Collection on Chinese Products” on the website of the U.S. Trade Representative Office on April 3. .
According to the proposed taxation list announced in April, China Merchants Electronics has determined that if the actual taxation list and proposal draft are the same, it will have less impact on LED, PCB, laser equipment, semiconductor equipment and other areas of listed companies, and mobile terminals and The security plate is not included in the tax list.
In addition, in addition to the tax bill, the White House statement also contains a number of key information that are worth noting: (1) Specific investment restrictions will be implemented, and exit controls will be strengthened for Chinese individuals and businesses related to high-tech M&A; (2 The United States will continue to sue against trade-related intellectual property rights agreements in the World Trade Organization; (3) Stop the non-economic transfer of important industrial technologies and intellectual property to China; (4) Ask China to eliminate all trade barriers.
CITIC Securities analysts believe that the U.S. attitude toward China has not really eased, trade frictions may still be repeated, and trade disputes between China and the U.S. will continue to fluctuate. There may be differences within the U.S. side, and dissatisfaction with the conditions of the joint statement that has been reached too quickly, it may also be Providing new chips for the U.S. follow-up visit to China.
CITIC Strategy anticipates that the U.S. Department of the Treasury will consider publishing comprehensive restrictions on investments in 7 U.S. emerging industries in the US within 1-2 quarters (based on the '301' survey report, including automotive, aviation, electronic devices, energy, health, and biology. Technology, information and communications technology, industrial machinery (including robots)); The rules for restrictive measures announced on June 30th are expected to be rolled out around these issues. In addition, USTR may launch a new round of '301 surveys for high-tech areas such as cloud computing. '.
Analyst Wang Hanfeng, a strategist at the Research Department of China National Gold Corporation, said that a 25% tariff on products worth US$50 billion will account for less than 2% of China’s total exports and about 10% of China’s exports to the United States. It was announced on the 15th of this month. It is expected that the number of high-tech products originating in China may not be large, and more are processing or assembly technology products. If this is indeed the case, it is expected that some U.S. technology companies will also be affected.
According to the IFC's strategy, the industries to which China is taxed will be the first to bear the brunt, especially in the fields of aerospace, information and communications technology, and machine tools; industries with a relatively high trade volume will also be affected, such as electronics (semiconductors), etc.; In the case of bilateral double-losing results, local short-term positive domestic agricultural products.
China and the United States confronted each other on the issue of 'technology transfer' at the WTO
Previously, the United States sued China to the WTO on March 23. According to Reuters, Chinese and U.S. diplomats have started controversy on the World Trade Organization (WTO) on Monday, involving US President Trump’s accusations of China’s theft of US intellectual property rights. Has led to two lawsuits and plans for the United States to impose huge punitive tariffs on Chinese goods.
Dennis Shea, U.S. ambassador to the WTO, said that 'forced technology transfer' is often an unwritten rule for companies trying to enter China's rapidly growing market, especially with Chinese-owned companies or state-led Chinese companies. Cooperation.
He said that China’s licensing regulations and administrative regulations have forced foreign-invested companies that are doing business in China to share technology, while government officials may also introduce technology transfer requirements through vague investment regulations.
Zhang Xiangchen, the Chinese representative to the WTO, categorically refuted the responsibilities of the United States. He said that there is no case of compulsory transfer of technology in China. The logic of the United States is 'guilty presumption'.
Zhang Xiangchen pointed out that technology transfer is normal business behavior, and the United States is the main beneficiary, while Chinese innovation is achieved through the 'Chinese people's diligence and entrepreneurial spirit, investment education and research, and efforts to improve the protection of intellectual property rights'.
According to the WTO regulations, if the dispute cannot be settled within 60 days, the plaintiff may apply for a ruling by a panel of experts to escalate the dispute and trigger legal cases that take years to resolve.
Shorten the validity period of visas for Chinese students in some fields of science and technology to crack down on 'theft of US intellectual property'?
On the evening of the 29th, the United States stated that it would impose a 25% tariff on China’s $50 billion worth of goods. Another directive was issued. The State Department of the United States stated that it plans to shorten the visa validity period for some Chinese citizens. A U.S. official stated that According to the directives received by the U.S. Embassies and Consulates, if Chinese graduate students study in the fields of robotics, aviation and high-tech manufacturing, their visa validity will be limited to one year. These research areas are listed by China as 'Made in China 2025'. ' The focus of the plan.
In addition, according to the directive, if Chinese citizens serve as researchers or managers in an entity within the special scrutiny list of the US Department of Commerce, they will need special permission from several U.S. agencies. The official said that in the visa application, These licenses are expected to take several months.
This move is seen as part of Trump's efforts to launch a crackdown on China that is involved in the theft of US intellectual property.
In response to the ugliness of the United States, the former British Ambassador Liu Xiaoming once stated that since the founding of New China, especially since the reform and opening up, China has not only achieved major breakthroughs in innovation such as artemisinin, artificial insulin, and hybrid rice, but also artificial intelligence, electric vehicles, 5G. In the new round of scientific and technological revolutions such as communications, we are at the forefront of the times and are increasingly becoming the leading force in the world's scientific and technological innovation.
At the same time, China’s international cooperation in intellectual property rights has become increasingly in-depth and it has contributed positively to promoting the development of the global intellectual property system towards balance, inclusiveness, and inclusiveness. He emphasized that the United States uses “forced technology transfer” as an excuse to suppress China’s technological innovation. The protection of domestic industries is completely wrong. There is no law in China that requires foreign companies to transfer their technology to Chinese companies. China resolutely cracks down on illegal activities in the field of intellectual property, and it is forbidden to let foreign companies investing in China 'forcibly transfer technology'. .
Attachment: May 29, US White House Official Statement (Translation by China Merchant Electronics Team)
Declaration on the Protection of Domestic Technology and Intellectual Property against China's Discriminatory and Inequitable (Burdensome) Trade Practices
Release Date: May 29, 2018
On March 22, 2018, the President signed a memorandum, announcing that the U.S. will take steps to protect domestic technology and intellectual property from some of China’s discriminatory and inequitable (Burdensome) trade practices. Prior to this, U.S. Trade Representative The office issued a report on China’s practices in technology transfer, intellectual property, and innovation. According to the memorandum of March 22, the president updated the progress of the announced action as follows: 1. In order to protect national security, the United States will Implementing specific investment restrictions and targeting export control for Chinese persons and entities related to high-tech acquisitions and acquisitions (export controls for Chinese persons and entities related to the acquisition of industrially significant technology). Investment restrictions and export controls will be implemented in 2018. Announced before June 30th, and will be implemented shortly thereafter.
2. Based on China's discriminatory practices in the licensing of intellectual property rights, the United States will continue to sue in the World Trade Organization for trade-related intellectual property rights agreements. The United States submitted material on these violations on March 23, 2018.
3. According to Article 301 of the Trade Act of 1974, the United States will levy a 25% tariff on products imported from China, including hi-tech, and China-made 2025 related products that are worth US$50 billion. The final taxation list will be announced on June 15th. In the subsequent period began to impose tariffs.
In addition, the United States will continue to work hard to protect domestic technology and intellectual property, stop non-economic transfer of important industrial technologies and intellectual property to China, and increase the openness of the Chinese market. Such as: The United States will require China to eliminate all trade barriers, including non-monetary Trade barriers. These barriers make it difficult and unfair to conduct business in China. The United States will demand that tariffs and taxes between the two countries be mutually beneficial in nature and value. Discussions with China will continue to discuss these topics. The United States looks forward to eliminating China through Strict import restrictions to solve long-standing structural problems and expand exports.