China Should Address Re-Export, Deemed Export Controls in Draft Export Law, Trade Groups Say
China should address and clarify several of its proposed export control provisions announced in its draft export law (see 2002040059 and 2001100047), more than 10 U.S., European and Japanese trade associations said in comments. The comments, released in February by the Center for Information on Security Trade Control, said the country should take “careful consideration” before finalizing the law and said trade associations have “significant outstanding concerns.” The comments were endorsed by the U.S. Computing Technology Industry Association and the National Association of Manufacturers.
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The groups are specifically concerned with China’s re-export control system and the deemed export control system mentioned in the draft, which contains “provisions outside of international export control regimes.” Re-export controls on non-Chinese countries could burden exporters and hurt the Chinese economy, which “depends on strong participation in the global value chain,” the comments said. If re-exports that incorporate products imported from China and other countries “require the approval of the Chinese government, then the substantial burden and risks involved” will create “strong disincentives to the use of Chinese products, which could lead to a change in suppliers,” the comments said.
In addition, if China were to “uniformly” control deemed exports, including “exchanges with foreign employees within a company” such as daily corporate activities, meetings, emails and more, company activities could not be conducted “smoothly and efficiently,” the comments said. If China follows through on its re-export control and deemed export control system, it would be “regarded as a negative factor in China’s investment and trade environment” compared with other Asian and non-Asian countries, the comments said.