The United States did not give a promise to China

Although Chinese media have claimed that the United States has made a commitment to “recognize China’s market economy status” and “relax its high-tech exports restrictions on China”. Such commitments cannot be found in the Sino-US framework agreement, even with the help of a magnifying glass.

If you have followed the coverage in the global media about the 3rd Sino-US Strategic Economic Dialogue, you may have gained the impression that the Chinese media and overseas media reported different meetings.

Overseas media showed great attention to the new military communication on arms sales to Taiwan, Korean confrontation and the South China Sea issue, but ignored the normalization of Sino-US dialogue and the results.

The Chinese media on the other hand focused on two traditional issues, China’s market economy status and the relaxation of restrictions of high-tech exports to China. The Chinese media have mostly viewed the US’ comments as positive. But clearly this is not the case.

Recognize China’s market economy system

Reporting on this round of the Sino-US Strategic Economic Dialogue the Chinese media kept on using the same sentence they used in 2009 and 2010: “According to the Sino-US Joint Commission, the two sides will fully recognize China’s market economy status in a cooperative and expeditious manner”.

But a commitment to recognizing China’s market economy status cannot be found in the framework agreement.

According to Sino-US WTO documents signed in 1994, the US must recognize China’s market economy statues no later than 2016.

However, Zhu Feng, Peking University professor, told Southern Weekend, “China’s market economy status will take a long time to be recognized.”

The importance of market economy status to China is that in anti-dumping cases brought against it, China can take the export products’ domestic price as reference, instead of the price in Singapore, India or Japan. China has an increasing share of international trade, yet it faces an increasing number of trade protection problems.

British scholar Stephen Green, believes that China’s seeking to market economy status also contains a desire to be accepted by the international community.

Niu Xinchun of the China Institute of Contemporary International Relations said that although the US has promised to meet the deadline, the attitude of US official makes this unlikely now.

Gary Locke, the US secretary of commerce, has repeatedly been asked about China’s market economy status. But during the 3rd Sino-US Strategic Economic Dialogue, it was reported that Locke said land privatization is one of the preconditions for granting China market economy status.

The US is setting more and more conditions before it will recognize China’ market economy status.

Relaxing restrictions on high-tech exports to China

The US has made a commitment to easing the restriction on high-tech exports to China many times, but there has been no big breakthrough in the last 10 years.

Niu said that the US wants to protect its core technology and worries about China upgrading its own military technology.

In fact, the honeymoon period for such high-tech exports was in 1980s, when the US was trying to contain the Soviet Union.

Though China has been allowed to launch US-made satellites and to import supercomputers and nuclear reactors, China has faced strict limits on the technology it can import.

Nevertheless, China may have policy space for obtaining US high-tech products, although the policy is in the US’ own interests.

According to Peking University scholar Zha Daojiong, the US is re-examining and simplifying its mechanism for high-tech exports, which involves a reassessment of military and civil products. This is because after the financial crisis the US attaches more importance to high-tech products as they are more competitive than and will thus help the US increase its exports.

edited by Ma Xin

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