Protectionism severely affects China-U.S. economic, trade relations: white paper

Source: Xinhua| 2018-09-24 20:16:24|Editor: Liangyu
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BEIJING, Sept. 24 (Xinhua) -- The protectionist policies of the U.S. government severely affect the normal development of China-U.S. economic and trade relations, said a white paper released by the Information Office of the State Council on Monday.

The white paper titled "The Facts and China's Position on China-U.S. Trade Friction" said there are numerous investment and trade restriction policies and actions adopted by the United States that distort market competition, hamper fair trade, and lead to breakdowns in global industrial chains.

They are detrimental to the rules-based multilateral trading system and severely affect the normal development of China-U.S. economic and trade relations, according to the white paper.

Many American regulatory policies are clearly self-serving and protectionist, as they run counter to the principle of fair competition and discriminate against foreign products.

The United States directly or indirectly restricts the purchase of products from other countries through legislation, subjecting foreign companies to unfair treatment in the United States, with Chinese companies being the main victims.

The white paper said the United States abuses "National Security Review" as a way to obstruct the normal investment activities of Chinese companies in the country.

The legislation process in the United States over the past 50 years shows that the U.S. security review of foreign investment has mainly been characterized by tighter laws, regulations and policies, expanded regulatory teams and scope of reviews, and more recently, intensified screening and restrictions vis-a-vis China.

Chinese companies are one of the main targets of the U.S. abuse of national security reviews, according to the white paper.

Since the establishment of the Committee on Foreign Investment in the United States (CFIUS), U.S. Presidents vetoed four transactions based on the committee's recommendation, all targeting Chinese firms or their related businesses. From 2013 to 2015, the CFIUS reviewed in total 387 transactions concerning 39 economies, among which 74 were transactions involving investment from Chinese companies, accounting for 19 percent of the total, the largest share among all countries for three years in a row.

The data on Chinese corporate investment being vetoed and blocked by the United States shows that the CFIUS review of Chinese investment has extended its reach from semiconductors and financial sectors to food processing sectors including swine feed.

In addition to an absence of transparency in the review process, excessive discretionary power, and lack of explanations for vetoes, there is an even more serious issue -- that normal transactions are being obstructed on the grounds of national security.

The United States has resorted to a huge number of trade remedy measures to protect its domestic industries, with many of these measures targeting China, said the white paper.

In anti-dumping investigations, the United States has refused to honor its obligation under Article 15 of China's WTO Accession Protocol and continued to use the surrogate-country approach, citing its domestic law. The average anti-dumping duty imposed by the United States on China is 98 percent, while that on market economies is 37 percent. Among the 18 U.S. rulings concerning Chinese products since the start of 2018, 14 had rates of more than 100 percent.

Moreover, the United States picks surrogate countries rather randomly, making the results of anti-dumping investigations highly unfair and discriminatory for Chinese exporters.

The white paper also listed other protectionist practices. The United States has provided businesses with large subsidies that distort market competition.

The United States has also put in place a large number of discriminatory non-tariff barriers that are more targeted yet disguised, in an effort to keep specific segments of the domestic market under strict protection, which constitutes a notable distortion of the trade order and market environment.

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