War of Words Begins Over New Regulation on Exports to China
The media battle has begun on the final regulation imposing restrictions on the export of certain goods to China that was issued last Friday by the Bureau of Industry and Security (BIS).
Today's San Jose Mercury News contains an editorial written by recently confirmed Undersecretary of Industry and Security Mario Mancuso noting that "U.S. export control policy toward China should evolve to keep up with these new realities in a manner consistent with our broader foreign policy."
The editorial notes that "the share of U.S. exports subject to Commerce Department export controls is tiny, but important. About $230 million worth of high-tech exports to China - 1.3 percent - required a license in 2006."
The editorial concludes by stating that:
The publication of the updated China policy regulations marks an end and a beginning. It is the end of a long debate about how to fine-tune export controls to strike the right balance in our complex relationship with China. This policy is also the beginning of new, enhanced opportunities for U.S. businesses to boost legitimate trade with one of the most important new economies in the world.Not surprisingly, the Chinese Government was not pleased by the regulation or persuaded by the U.S. Government's explanation of the purpose of the regulation. Tuesday's edition of the online version of the state-run China Daily newspaper contains an editorial entitled "Unwise US Policy" stating that "it makes little sense for a country to restrict its own exports while claiming to be serious about cutting its trade deficit."
The editorial also states that this proposal, "smacks of Cold-War mentality" and "will not only affect the growing list of US companies that export to China but also undermine bilateral or unilateral efforts the two countries have made to balance their trade relations."
Update: China's People's Daily reported on June 19th that China's Foreign Ministry spokesman issued the following official comment on the China regulation:
"Joint efforts are needed to enhance China-U.S. trade cooperation and we hope the U.S. make positive and constructive efforts on the trade imbalance, including relaxing control of high-tech products export to China" and "If the United States wants to redress the trade imbalance, it should take concrete actions on high-tech products export."