Trade body slams US restrictions on IT

Officials of a Chinese trade chamber reiterated Monday their firm opposition to a US government bill to restrict the US government agencies from buying Chinese information technology (IT) products, saying the bill discriminates against Chinese enterprises and violates WTO rules.

"The US passed the measures under the guise of 'national security' and locked Chinese companies out of the US market by presuming all Chinese companies are guilty. It seriously undermines the confidence of Chinese industries in the US government and market," Chen Huiqing, deputy director of the legal department at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), told the Global Times.

Chen could not provide estimates of the potential losses for Chinese companies given that the procurement volume for the related US government agencies is unclear.

"The procurement restriction currently covers four US government agencies. But the chamber and enterprises are concerned that the bill will set a bad precedent and that more US government agencies may be barred from purchasing from Chinese companies in the future," Chen said.

On March 26, the US passed a spending bill that restricted the US Commerce and Justice departments, space agency NASA and the National Science Foundation from buying IT products from firms thought to be "owned, operated or subsidized" by China.

The agencies can buy the technology, but only after consulting with the Federal Bureau of Investigation, and if there is not believed to be any risk of "cyber espionage or sabotage associated with the acquisition of the system," according to the bill.

The bill, effective from March 28 to September 30, could deal a harsh blow to major Chinese IT product suppliers, including Huawei Technologies, ZTE Corporation and Lenovo Group.

Huawei and Lenovo did not respond to questions from the Global Times by press time.

In a statement sent to the Global Times Monday, ZTE insisted that the company is committed to transparent operations and complies with the rules of local markets.

"China could challenge the US bill at the World Trade Organization (WTO) but it is difficult for China to win the case because China is not a member of the WTO Government Procurement Agreement (GPA)," Tu Xinquan, associate director of the China Institute of WTO Studies at the University of International Business and Economics, told the Global Times Monday.

"The US discriminatory measures will not only complicate the procurement procedures for its government agencies but also reinforce the negative attitude of Chinese industries toward the US government and market," Tu said.

The Chinese government has denied any involvement in cyber espionage and expressed its strong opposition to the US bill in late March.

Shen Danyang, spokesman of the Ministry of Commerce, said on March 29 that the bill sent a bad signal and directly affected the normal trade and investment cooperation between Chinese companies and their US partners.