Intel Corporation, the world's largest maker of computer chips, on Thursday called on the US government to resolve commercial disputes with China through negotiations.

"We encourage both governments to exhaust all possibilities before resorting to litigation or retaliation," said Sean Maloney, executive vice president and general manager of Mobility Group for Intel Corporation, when testifying before the Senate's Finance Committee.

"Various factors have contributed to rising anxiety about US commercial relations with China," Maloney said. "In the short and medium term, these concerns must be dealt with through clear and consistent communication between governments aimed at solving problems at hand in a timely manner."

Maloney said the US and Chinese governments announced in July 2004 that they had successfully negotiated an agreement on the issue about value-added tax rebate while avoiding a formal dispute resolution proceeding at the World Trade Organization.

"The quick and mutually satisfactory resolution of this problem was a very positive development for US-China economic relations and for the worldwide semiconductor industry," Maloney said. He was testifying on behalf of Intel and the US Chamber of Commerce.

"We believe this approach provides a good example of how negotiations can help avoid a potentially damaging long term trade dispute," Maloney added.

Maloney noted that the US-China commercial relationship is of immense and increasing importance to both countries. China holds tremendous opportunities for US companies.

"Clear and constructive dialogue between both governments is critical" to resolving problems, Maloney said. "Industry and other stakeholders must also work together to implement capacity building programs and share best practices in order to help prevent future difficulties."

The United States was ranked second among China's global trading partners in 2004, and China was the third largest trading partner for the United States. US exports to China have grown by 114 percent since 2000, five times faster than to any other country, according to Maloney.

Source: Xinhua