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Probes 'protecting' US business
Date:2010/10/27      View:987
US probes against Chinese imports are being used to help US companies fend off foreign competition and keep their competitive edge, a senior Ministry of Commerce official has said.

"On the one hand, Section 337 is an important mechanism protecting intellectual property rights registered in the United States. But on the other hand, it is acting as a tool to help US companies fend off foreign competitors and maintain competitive edges in their market," said Zhong Shan, vice-minister of commerce, during the China-US seminar on US Section 337 investigations on Tuesday.

Section 337 investigations target unfair acts and competition related to imported goods, including infringement of US patents or registered trademarks.

"Due to time limitations and shortage of funds, Chinese companies, especially small and medium-sized companies, always find themselves in disadvantageous positions when responding to Section 337 investigations," Zhong said.

His remarks followed recent US efforts to aggressively conduct trade remedy cases against Chinese imports, including many Section 337 investigations. But many of the country's previous measures against China were considered to run against World Trade Organization (WTO) rules.

On Tuesday, the WTO dispute settlement panel announced that a US ban on chicken imports from China is not in line with the rules of the global trade arbitration organization. The US Congress imposed the ban in a spending bill to prevent US authorities from importing chicken from China last year. The US has not objected to the ruling by the WTO.

The ministry welcomed the announcements and said that the restrictive measures of the US hurt Chinese exports.

During the first half of this year, the US initiated 28 Section 337 investigations worldwide. Of these, 12 cases pointed to China. Chinese exports of solar energy lamps, crystal displays and printers were affected.

By the end of September, the US had launched 102 Section 337 investigations against China, with the majority of them occurring in the past five years.

"Technology intensive products, such as electronic, information and machinery products that involve patents, are major victims of the 337 investigations," Zhong said.

"There is a clear sign that the Section 337 investigations targeting China are growing. China is the major target of the investigations," said Wang Guiqing, deputy chairman of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

But Chinese companies are also well on track for intellectual property rights (IPR) applications, analysts said. Last year, China applied for nearly 8,000 global IPRs, an increase of 30 percent year-on-year. That ranked the country fifth in the field worldwide.

"The reason for the upward trend (of investigations) lies in the unequal measures taken by the US against Chinese enterprises, such as lower standards for approval over the initiation of investigations," Wang said.

"While Chinese technology innovation accelerates, the foreign nations will raise the alert and try to fully leverage the 337 investigations to beat down their Chinese counterparts," Wang said.

With the US mid-term election campaign gearing up and the country's unemployment rate remaining high, many say the US has stepped up efforts to attack China and its policies to shift its own problems to Chinese enterprises. US senators are also considering legislation to charge duties for Chinese imports following allegations that China undervalues its currency.

The US is also shifting its focus to high-value-added products, analysts said. The US recently launched investigations against China by claiming that the country subsidized its clean energy sector, but Chinese authorities and industrial associations have denied the accusations.
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