Huawei, ZTE product ban by US violates WTO rules, shows discrimination: commerce ministry

By Huang Ge Source:Global Times Published: 2018/2/23 20:03:40

A new bill that would ban the US government from buying Huawei and ZTE phones discriminates against Chinese companies and violates the principles of fair trade, the Ministry of Commerce (MOFCOM) said on Friday.

The comment came after two US Republican senators on February 8 introduced a bill that would forbid the US government from buying or leasing products made by Huawei and ZTE.

The senators introduced the legislation citing concerns that the Chinese government could exploit hypothetical backdoors in their devices to spy on US government officials.

"Such a move shows an obvious Cold War mentality and is discrimination against Chinese companies," the ministry said in a note faxed to the Global Times on Friday.

Such conduct goes against WTO rules and also runs counter to the principle of fair trade which has been emphasized many times by the US, the ministry noted.

"It will also harm Chinese companies' confidence in the US business environment," the note reads.

Since the beginning of the year, the US has strengthened scrutiny of Chinese firms, citing security concerns.

On January 2, Ant Financial's plan to buy US money transfer firm MoneyGram International Inc collapsed after the Committee on Foreign Investment in the US rejected the proposals over national security concerns.

US semiconductor firm Xcerra Corp on Thursday canceled its sale to a Chinese company, the latest instance of US regulators blocking Chinese takeovers of US tech firms, according to media reports.

Xcerra and Hubei Xinyan Equity Investment Partnership mutually agreed to call off the deal after deciding it would not be cleared by the committee.

It might look like the US was protecting national security, but in fact the US was deploying protectionist measures against investment from China, said Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

"The US is selective about Chinese capital… It prefers Chinese companies that can offer jobs for its people, like Fuyao Glass, but restricts domestic firms from investing in the US tech industry in case Chinese companies acquire its technology," Bai said.

The US has always required China to open its markets, the tech industry in particular, while at the same time limiting access to Chinese companies for its own tech sector, Bai said, calling it "unequal and asymmetric opening-up."

Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges in Beijing, said that the US is on alert toward the fast growth of China's economy.

It would be hard for investors nowadays to believe that the US has long advocated investment liberalization and facilitation, Wang told the Global Times on Friday.

Experts said that given the pressure from competition with Chinese industries, the US is likely to continue to hinder Chinese investment in the US market in the future, especially in sectors like technology and energy.

Failed deals will hit Chinese firms' confidence in the US market, experts suggested.

The commerce ministry said in the note faxed to the Global Times that it hoped the US could treat Chinese companies and products in a fair and objective way.

The US is expected to create a more open, transparent and convenient business environment and to secure sound and stable growth of Sino-US economic and trade relations, which will also be conducive to the growth of the US economy, according to the note sent from the ministry.

Newspaper headline: Huawei ban discriminatory: MOFCOM

Posted in: COMPANIES

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