China Archives

Global Industry Letter to China Urges for ITA Expansion

Published on July 23, 2013

USCIB, along with numerous business associations and companies from around the world, signed a letter to Chinese Vice Premier Wang Yang urging for expanded product coverage of the Information Technology Agreement (ITA).

What would have been the final round of ITA expansion talks were suspended in Geneva the week before due to China’s “disproportionately large product sensitivities list” that was “more than twice as long as any other country’s sensitivities list and included a request for the removal of roughly 100 product lines from the negotiating table,” the letter remarked. This has become the main obstacle in obtaining an ambitious ITA expansion outcome this year, which would, by one estimate, add $190 billion to global GDP annually.

The letter states that “China stands to be one of the largest beneficiaries of an expanded ITA” because of its considerable presence in the global tech industry, boosting its economy and innovation capacity. The letter thus urges China to significantly reduce the size of its sensitivities list so that ITA talks can reach a conclusion and further increase economic growth, competitiveness, and innovation around the world.

Click here to read the global industry statement supporting ITA expansion, signed by 81 associations from 31 economies and regions around the world.

Staff contacts: Rob Mulligan and Justine Badimon

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US and China Agree to Action on Climate Change

Published on July 22, 2013

smogAt this month’s U.S.-China Strategic & Economic Dialogue (S&ED) in Washington, D.C., the two countries agreed to undertake a number of steps to address climate change. This followed an announcement that the two nations will begin formal talks on a high-standard bilateral investment treaty (click here for our earlier report).

In May, the USCIB China Environment Task Force met with the EPA’s Steve Wolfson to discuss coordination and capacity-building between China and the U.S. on climate change, including Secretary of State Kerry’s newly created U.S.-China Climate Change Working Group.

On July 10, the working group presented its report on bilateral cooperation between the two countries. This non-binding climate plan lays out five new action initiatives with the goal of reducing greenhouse gas emissions and air pollution by tackling the largest sources of emissions in both countries, focusing on: vehicle emissions; smart grids; carbon capture, utilization and storage; greenhouse gas data collection and management; and building and industry energy efficiency.

In a fact sheet, the U.S. Department of State released the following details of specific projects and commitments.

  1. Reducing emissions from heavy-duty and other vehicles: Heavy-duty vehicles are the fastest growing source of greenhouse gas emissions from transportation in the U.S. and account for more than half of transportation fuel consumed in China. Light-duty vehicles also contribute significantly to greenhouse gas emissions, fuel use and air pollution. Efforts under this initiative will include advancing comprehensive policies to reduce CO2 and black carbon emissions.
  2. Increasing carbon capture, utilization, and storage (CCUS):
    The U.S. and China account for more than 40 percent of global coal consumption. Emissions from coal combustion in the electric power and industrial sectors can be significantly reduced through CCUS. China and the U.S. will cooperate to overcome barriers by implementing several large-scale, integrated CCUS projects in both countries, which will engage companies in both countries and allow for enhanced trade and commerce.
  3. Increasing energy efficiency in buildings, industry and transport:
    The U.S. and China recognize that there is significant scope for reducing emissions and costs through comprehensive efforts to improve energy efficiency. Both sides commit to intensify their efforts, initially focusing on promoting the energy efficiency of buildings, which account for over 30 percent of energy use in both countries.
  4. Improving greenhouse gas data collection and management:
    Both countries place a high priority on comprehensive, accurate reporting of economy-wide greenhouse gas emissions data to track progress in reducing emissions and to develop and implement mitigation policies. The U.S. will work with China to build capacity for collection and management of greenhouse gas emissions data.
  5. Promoting smart grids: The power sector accounts for over one third of U.S. and Chinese carbon emissions. To reduce greenhouse gas emissions from the power sector and put in place a resilient, low-carbon power grid, both countries will collaborate on developing modern, “smart” grid systems, deploying renewable and clean energy, and improving demand management.

In their joint report, the two parties made clear that this just the beginning of a new phase in U.S.-China cooperation on climate change issues, where the Climate Change Working Group is designed to serve as the new leader in this critical bilateral relationship. Working closely with private sector and non-governmental stakeholders, the working group will develop implementation plans for the following initiatives by October 2013, with the goal of continuing to find new ways to expand cooperation on climate and clean energy issues.

Staff contacts: Norine Kennedy and Justine Badimon

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US-China Strategic Economic Dialogue Announcement of Investment Talks

Published on July 12, 2013

4557_image002The 5th Round of the U.S.-China Strategic & Economic Dialogue (S&ED) concluded this week in Washington, D.C. with a promising announcement from China that they intend to begin formal talks on a high-standard bilateral investment treaty (BIT) with the United States.

In final statements, Treasury Secretary Jacob Lew said that his Chinese counterparts in the S&ED, Chinese State Councilor Yang Jiechi and Chinese Vice Premier Wang Yang, are ready to include all stages of investment and all sectors in the BIT negotiation.

This high-level agreement on basic terms of reference for negotiation of a high-standard U.S.-China BIT is quite encouraging. “If in fact China agreed to negotiations on all elements of an investment treaty, they would be opening up their economy considerably,” said USCIB Vice President Shaun Donnelly in an interview with Marketwatch. Donnelly said that all types of U.S. companies would benefit, especially oil and gas firms and financial-services entities.

Actual negotiation of such a BIT – including broad protections for investors, comprehensive definitions and coverage, strong investor-state dispute settlement provisions, and U.S.-style “pre-establishment” provisions for market-opening investment opportunities in both directions – will likely be quite challenging and will certainly take some time. But this high-level commitment to a negotiation of U.S.-style “gold standard” BIT is a very encouraging development.

Some other key developments from the S&ED include:

  • Acknowledgement of the cyber-theft issue and willingness to address the issue head-on
  • China’s announcement that it plans to submit a revised offer to join the WTO Government Procurement Agreement (GPA) by the end of 2013
  • China’s commitment to further open up to foreign investment – announcing a pilot free-trade zone in Shanghai for services
  • China’s commitment to further exchange-rate reform and enhanced foreign-exchange reserve transparency
  • China’s promise to provide requested audit work papers to U.S. market regulators, a step toward resolving issues on enforcement cooperation related to companies listed in the United States
  • Commitments from China to take important steps toward significant reform to the exchange-rate system, financial system, state-owned enterprises and taxes on businesses.

Please see final remarks from the S&ED here: http://www.state.gov/s/d/2013/211850.htm.

US-China Joint “Economic Track”S&ED Fact Sheet: http://www.treasury.gov/press-center/press-releases/Pages/jl2010.aspx.

Staff contacts: Justine Badimon and Shaun Donnelly

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Deepening OECD-China Cooperation

Published on July 8, 2013

Trade and investment relations with China remain at the top of the international agenda, as illustrated by this week’s latest round of talks under the U.S.-China Strategic and Economic Dialogue. It is in this context that the BIAC China Task Force presented business perspectives to a meeting of OECD Ambassadors, national delegates and OECD secretariat officials on June 21 in Paris. BIAC representatives voiced concerns about a looming credit crunch facing the Chinese economy, as well as longer-term issues pertaining to the overall business climate and environmental pressures.

As these challenges continue to grow in China, BIAC representatives encouraged the OECD to seize this moment to advise and work with China’s new leadership on specific reforms conducive to strong and more sustainable growth, such as better corporate governance, anti-corruption and reform of state-owned enterprises. BIAC’s China Task Force is looking forward to closer cooperation between the OECD and China this year and to exploring more opportunities to engage on issues where the OECD can provide value.

A summary of the meeting and the BIAC China Task Force final presentation will be circulated in the coming weeks to USCIB’s China Committee.

Staff contact: Justine Badimon

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The Law of Letters of Credit in China

Published on April 18, 2013

New Guide to Letter of Credit Law in China

4488_image001New York, N.Y., April 18, 2013 – A new publication from the International Chamber of Commerce (ICC) offers immense help to anyone doing export/import business in China using letters of credit (LC), according to the United States Council for International Business (USCIB), ICC’s American national committee.

The Law of Letters of Credit in China, now available for purchase from the USCIB International Bookstore, provides detailed commentary, in-depth explanations and critical analyses that help shed light on how Chinese LC disputes are resolved and the judicial interpretations that define China’s LC system, based on over 500 court case decisions.

“Although China has not yet enacted any LC law, over the past 20 years, the Supreme People’s Court has promulgated a series of judicial interpretations, provisions and meeting minutes that combine to form the legal authority on LCs in China,” said Li Jian, general counsel of the Export-Import Bank of China. “The present work is an indispensible guide for law, trade and banking professionals trying to understand and apply these judicial interpretations.”

The publication’s author, Jin Saibo, who was involved in the eight-year drafting process of The Supreme People’s Court of China’s LC Judicial Interpretations, has structured the book to cover such critical issues as:

  • Conformity of China’s LC system with international practices, i.e., International Standard Banking Practice
  • Consolidation of disputes concerning LCs and underlying practices
  • Statutory limitations of action
  • Recovery for damages
  • Reasonable legal fees

The Law of Letters of Credit in China is available in English only.

About USCIB:

USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network encompassing leading international business organizations, including ICC, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment.

USCIB’s Trade Services include: ATA Carnet, commonly known as the Merchandise Passport, which allows goods to enter over 85 customs territories tax- and duty-free for up to one year; eCertificates of Origin, fully electronic processing of Certificates of Origin, returned to you by e-mail, fast and complaint with ICC Guidelines for Certificates of Origin; and the USCIB International Bookstore, which enables customers to learn international business through unique titles covering a range of topics.

Contact:

Hsin-Ya Hou, USCIB International Bookstore
+1 212.703.5066, hyhou@uscib.org

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News Brief High Standards Needed in U.S. – China Investment Treaty

Published on March 5, 2013

Columbia University’s Vale Center has published a short essay by Shaun Donnelly, USCIB’s vice president for investment and financial services, presenting the business case for a high-standards U.S.-China bilateral investment treaty (BIT). The essay appears in the center’s journal Columbia FDI Perspectives and is available by clicking here.

Donnelly’s piece responds to an earlier essay in the journal by Karl Sauvant and Huipeng Chen advocating a different approach toward the China BIT negotiations. He argues that it is essential to get a comprehensive, high-standard BIT with China, with meaningful market-opening liberalization as well as strong investor-state dispute resolution provisions, and not to settle for a quick compromise with lower protections just for the sake of getting a deal. Donnelly argues that both the U.S. and Chinese governments – as well as their respective business communities – need the strong protections and dispute-settlement provisions one can only get in a high-standard, 21st-century BIT.

USCIB is actively working to promote member views in the context of the U.S.-China BIT negotiations, and views a high-standards BIT as a key element in USCIB’s 2013 trade and investment agenda.

Staff contact: Shaun Donnelly

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Latest U.S.-China Joint Commission on Commerce and Trade

Published on December 21, 2012

4416_image002The 23rd session of the U.S.-China Joint Commission on Commerce and Trade (JCCT) concluded in Washington, D.C. on December 19.  Established in 1983, the JCCT is the main forum for addressing bilateral trade and investment issues and promoting commercial opportunities between the United States and China.

The latest forum was chaired by U.S. Trade Representative Ron Kirk, Acting Secretary of Commerce Rebecca Blank and Chinese Vice Premier Wang Qishan. Representatives from 25 Chinese government agencies also participated, as did U.S. Ambassador to China Gary Locke
and U.S. Secretary of Agriculture Tom Vilsack.

According to Ambassador Kirk’s office, despite advancements on some key issues – such as addressing concerns on intellectual property rights, agreeing on the elimination of significant regulatory obstacles impeding U.S. exports and securing meaningful steps toward China’s accession to the WTO Government Procurement Agreement – there is still much work to be done to ensure that China’s market is open to American exports and investment.

The U.S. and Chinese governments also signed agreements related to enhancing understanding and measurement of bilateral trade, and increasing the numbers of reverse trade missions, which support China’s continued development while creating more U.S. exports and jobs.

According to Justine Badimon, USCIB’s manager of China and Asia-Pacific affairs, business hopes to see continued increased commitment from both sides on building sustainable strong economic ties to ensure mutual benefits, and supports the advancement of economic issues through meaningful bilateral dialogues such as the JCCT and the Strategic & Economic Dialogue.

Click on the links to read a USTR press release on the JCCT’s conclusion and a fact sheet on the meetings detailing key results.

 

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USCIB Convenes China Business and Legal Forum

Published on November 14, 2012
The Washington, D.C. forum brought together Chinese and American business leaders and government officials.
The Washington, D.C. forum brought together Chinese and American business leaders and government officials.

Yesterday in Washington, D.C., USCIB partnered with the China Council for the Promotion of International Trade (CCPIT) and the U.S.-China Legal Exchange Foundation to host a Business and Legal Forum on U.S.-China Trade and Investment at the Cosmos Club. A large Chinese delegation, headed by CCPIT Vice President Dong Songgen, included senior executives from Chinese companies, industry trade groups, legal experts and government officials.

The forum, which was moderated by Tad Ferris, a partner with Holland & Knight LLP and co-chair of USCIB’s China Committee, provided a large Chinese delegation the opportunity to meet with American executives and policy makers, share experiences and gain a deeper understanding of the opportunities for trade and investment between our two countries. The event addressed a range of business issues, presenting both Chinese and American perspectives on such critical topics as intellectual property and innovation, energy and green growth, and enabling frameworks for trade.

Ferris said that the significant effort that went into this forum reflects the importance of the U.S.-China relationship to USCIB and USCIB member companies. He also observed that the forum reinforced bilateral understanding and channels of communication that help USCIB members, Chinese counterparts, and other stakeholders understand critical issues in this relationship and seek mutually beneficial solutions.

Nicole Melcher, the Commerce Department’s director for China and Mongolia, provided keynote remarks, explaining how the U.S. seeks to help smaller companies tap into the burgeoning Chinese market. She said helping American SMEs export to China is a top priority under the Obama administration’s National Export Initiative, which aims to double U.S. exports by 2015.

While SMEs account for more than a third of total U.S. exports, Melcher said, only 10 percent of smaller companies that export are doing so to China. She observed that these companies’ reluctance to enter the Chinese market reflected the uncertainties and risk of doing business there, as well as increasingly aggressive and competitive Chinese companies.

USCIB China Committee Co-Chair Tad Ferris (Holland & Knight) and keynote speaker Nicole Melcher of the U.S. Department of Commerce.
USCIB China Committee Co-Chair Tad Ferris (Holland & Knight) and keynote speaker Nicole Melcher of the U.S. Department of Commerce.

Melcher said the administration aimed to undertake a range of efforts to spur SME exports to China, including a national export marketing campaign, expanded access to financing through the Export-Import Bank and Small Business Administration, and a “one-stop shop” for federal export assistance to promote trade with China.

Melcher also noted the importance of the US-China Joint Commission on Commerce and Trade (JCCT) which is the primary forum for addressing US-China trade issues. The next JCCT will be held before the end of the year.

Another speaker, He Ning, the minister for economic and commercial affairs at the Chinese embassy in Washington, said the economies of China and the United States have never more closely linked than they are today. Total bilateral trade volume reached $466 billion last year, and is expected to reach a new record high this year, he said, while the two countries have become each other’s second-largest trading partners.

But the relationship is not perfect or free of problems, He stated. With have very different legal systems, there is a need for ongoing exchange of legal knowledge between experts in each country to help Chinese and American executives navigate each other’s markets more smoothly, he said.

USCIB Senior Vice President Rob Mulligan praised CCPIT for taking the initiative to propose the forum. “CCPIT has been an important and strategic partner to USCIB for many years,” he said, “and we greatly appreciate the long-term cooperation we have maintained through work on such areas as ATA Carnet and Green Growth.” He said the two groups would work together on a range of initiatives in the future, including a possible forum for USCIB members in Beijing.

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USCIB Releases 2012 Report on Chinas Compliance With its WTO Commitments

Published on October 22, 2012

4397_image002On October 16, USCIB submitted its 2012 statement to USTR on China’s compliance with its WTO commitments following an earlier Federal Register Notice. USCIB’s Justine Badimon, manager of the China Committee, worked with members from across industry sectors to compile the latest issues and update areas of last year’s report to reflect the current state of affairs.

As in previous reports, USCIB commended the work over the last year of both the U.S. and Chinese governments at maintaining the momentum of important bilateral dialogues such as the U.S.-China Joint Commission on Commerce and Trade (JCCT) and the Strategic & Economic Dialogue (S&ED) as well as several working relationships between U.S. and Chinese agencies, such as the Environmental Protection Agency (EPA) and China’s Ministry of Environmental Protection (MEP). Engagement and exchange of best practices with the Chinese government and business community is a productive approach to addressing our current challenges.

While the positive influence of these dialogues and resulting commitments and outcomes is clearly noted, throughout the report USCIB members detail the on-going concerns with China’s compliance with its WTO commitments in horizontal areas (anti-dumping, certification, licensing, IPR, government procurement, market access, regulatory environment, standards, SOEs and taxation) sector specific concerns (ag bio, audiovisual, chemicals, customs, electronic payments,  express delivery, pharma, software, telecommunications) and finally in a third section which gives examples of certification licensing and testing requirements. Across all sectors, members call for more transparency and better efforts at consistency with regard to China’s regulatory agencies as well as increased efforts at meeting their WTO obligations. If you would like to receive a copy of the 2012 report, please contact USCIB’s Alexandra Garcia at agarcia@uscib.org

Following the submission of the Report to USTR on October 18 in Washington, DC the USCIB China Committee and Trade & Investment Committee met for a briefing with Audrey Winter, deputy assistant USTR for China Affairs. The meeting was held at the offices of Holland & Knight and chaired by Tad Ferris, partner of Holland & Knight and current co-chair of the USCIB China Committee.   This was a timely meeting considering the political climate in both economies, the U.S. presidential election and China’s 18th Party Congress where Xi Jinpeng will be officially announced as new party leader replacing President Hu. Winter briefed the group on the current environment of bi-lateral economic relations between the U.S. and China and gave a snapshot of what is currently on the agenda for USTR with regard to China. Winter reported that at this time there is no public date for the next JCCT meetings but there is hope that there may be a meeting before the end of the year.

The China Committee looks forward to meeting with Winter again for future meetings to follow-up on concerns listed in the WTO report as well as other issues. The meeting also included a reporting out on recent U.S. Government restrictions on Chinese investment by Ron Oleynik, partner of Holland & Knight, and concluded with next steps for the Committee.  A summary of the discussion will be circulated to Committee members.

We thank all USCIB members who took the time to participate in the drafting of our 2012 WTO report and thank those who attended the October 18 meeting.

2012 Report on China’s Compliance with its WTO Commitments

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USCIB Represents Business at APEC Summit

Published on September 14, 2012
USCIB’s Justine Badimon and Peter Robinson in Vladivostok
USCIB’s Justine Badimon and Peter Robinson in Vladivostok

The APEC Russia host year recently came to a close with the APEC CEO Summit, Ministers’ and Leaders’ meetings held in Vladivostok in early September.  USCIB President & CEO Peter Robinson and Justine Badimon, manager for APEC affairs, attended the CEO Summit on behalf of USCIB members and the U.S. APEC Business Coalition from September 5-8.

The Business Coalition was represented in Vladivostok by USCIB and our partners, the National Center for APEC, U.S. Chamber of Commerce, U.S. ASEAN Business Council and the U.S.-Russia Business Council, along with many executives from USCIB member companies.

Ministers and leaders from the APEC economies met in Vladivostok over the first week of September to assess the progress of the 2012 year and plan the way forward. On September 6th APEC ministers released a positive statement on their commitment toward fostering trade and economic growth in the region, and addressing next generation trade and investment issues.

Over 50 representatives from U.S. companies attended the summit, which included a full agenda of panel discussions with members of the business community on current trade and economic issues affecting the Asia-Pacific region.  Leaders addressing the summit included Russian President Vladimir Putin, Chinese President Hu Jintao, U.S. Secretary of State Hillary Clinton, and Mexican President Felipe Calderon.

Chilean President Sebastian Pinera meets with Robinson and other members of the U.S. APEC Business Coalition.
Chilean President Sebastian Pinera meets with Robinson and other members of the U.S. APEC Business Coalition.

U.S. participants also took part in the Business Coalition bilateral meetings, which were held parallel to the summit, with senior foreign government officials from the APEC economies including Vietnamese President Truong Tan Sang, Chilean President Sebastian Pinera (which Robinson chaired) and Chinese Minister of Commerce Chen Deming. These bilateral meetings gave the U.S. business community an opportunity for dialogue on APEC and Trans-Pacific Partnership issues and a chance to express concerns about business issues faced in those economies. The coalition also met with U.S. officials including Under Secretary of State Robert Hormats, and Deputy U.S. Trade Representatives Demetrios Marantis and Michael Punke.

One of the most notable outcomes from the ministers and leaders meetings in Vladivostok was agreement on a list of Environmental Goods and Services (EGS) that directly and positively contribute to APEC’s green growth and sustainable development objectives. By the end of 2015 applied tariff rates on all environmental goods included on the list are to be reduced to five per cent or less.

In a letter to U.S. Trade Representative Ron Kirk, Robinson wrote: “Together with agreement by the APEC ministers on a comprehensive approach to trade facilitation and supply chain connectivity – additional high-priority items for USCIB’s members – the green goods agreement demonstrates the ability of APEC to tackle and push forward important shared priorities.”

In addition to significant agreements on APEC’s approach to supply-chain performance and commitments to work toward prevention of local content requirements in the region, USCIB welcomed the formation of a Virtual Customs Business Working Group, which will enhance collaboration with the private sector on customs-related issues. Nasim Deylami, USCIB’s manager for customs and trade facilitation, played an integral role in creating the Virtual Working Group with the support of USCIB members and U.S. Customs and Border Protection (CBP). We look forward to the progress that this group will bring to maintaining a consistent and meaningful dialogue on customs issues in the APEC arena.

Turning ahead to Indonesia’s host year in 2013, USCIB is looking forward to continuing our role ensuring the engagement of the business community in maintaining the positive momentum of work and dialogue in the APEC process. The next APEC CEO Summit will take place October 5-7 in Bali, Indonesia.

To learn more about USCIB’s APEC work, please keep an eye out for USCIB’s 2013 APEC Priorities Paper, which will be finalized in late October.

Staff contact: Justine Badimon