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US under fire over VEUs
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08:59, October 26, 2007

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The government yesterday criticized the United States over a new system that's likely to reduce China's imports of hi-tech products.

The US Commerce Department's Bureau of Industry and Security last week gave five Chinese importers validated end-user (VEU) status after a screening process.

Other Chinese companies face a complicated process to import hi-tech goods.

Wang Xinpei, spokesman for the Ministry of Commerce, expressed "strong dissatisfaction" over the US move, as the "US side did not have enough consultation with China to reach a consensus on implementing the new VEU system".

The five approved VEU companies are: Applied Materials China; Boeing Hexcel AVIC I Joint Venture; National Semiconductor Corp; Semiconductor Manufacturing International Corp; and Shanghai Hua Hong NEC Corp. They are authorized to import certain controlled items without individual export licenses.

The United States should not visit any companies registered in China for VEU screening without permission from the Ministry of Commerce, Wang said.

The government expects the US to ease its restrictions on hi-tech exports to China to address the trade imbalance between the two countries. But the US argues the VEU mechanism for export control is designed to protect its national security.

"The approval of these VEU candidates is the latest step in implementing our dual-use export control policy towards China, which strikes the right balance in our complex relationship," the US Bureau of Industry and Security Under Secretary Mario Mancuso said when he announced the five VEUs. "The steps are good for American exporters and jobs, and good for national security."

Wang said the two sides should encourage development of bilateral hi-tech trade by strengthening negotiations and properly dealing with the VEU issue in line with the consensus previously reached.

A number of US businesses have also called for a more open Sino-US hi-tech trade system.

The American Chamber of Commerce, which represents US businesses in China, said in its white paper, American Business in China, that certain items in the US export control policy are likely to hurt not only Chinese importers but also US businesses.

Source: China Daily



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