Beijing Rescinds Controversial Technology Trade Policy

By Ashok Bindra July 05, 2011

For years, foreign companies and governments trading with China have been complaining about a technology trade policy that favors Chinese producers in government purchases of computers and other technology products. Overseas trading partners have been complaining that this favoritism violates the international free trade norm.

According to a recent report on Yahoo! News site, China has repealed such a trade policy. As per the report, the Finance Ministry announcement was the second time in a month that Beijing repealed a technology policy after complaints by its trading partners.

On June 7, the U.S. government announced that China was withdrawing measures that American officials said improperly subsidized Chinese wind turbine makers, wrote Yahoo! News reporter Joe McDonald.

Late Wednesday, a brief finance ministry statement read that it would no longer enforce procurement rules that are part of a decade-old “indigenous innovation” campaign to spur domestic technology development. They required government agencies to favor Chinese makers in six areas including computers, clean power and communications, wrote McDonald.

In a written response to questions, the report quoted Davide Cucino, president of the European Union Chamber of Commerce in China, as saying “This repeal represents a forward step toward leveling the playing field in the government procurement market in China.”

In January, during President Hu Jintao's visit to Washington, Chinese officials agreed to repeal policies linking innovation to government purchasing. The regulations were a core element in complaints by foreign companies that Beijing is trying to reserve China's most promising industries for domestic competitors in violation of its free-trading pledges, according to Yahoo! News report.

In a written statement, Ted Dean, chairman of the American Chamber of Commerce in China, said, “The repeal is a meaningful step by the Chinese government in delinking government procurement from indigenous innovation.” Dean added, the group would watch to see whether the latest change was carried out at the local level.

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Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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