US proposals to expand licence requirements for high-technology companies exporting to China will stifle business and increase uncertainty over bilateral trade, the Ministry of Commerce said yesterday.

If approved, the rule proposed by the US Department of Commerce and the Bureau of Industry and Security last month would set "unreasonable obstacles" to trade and harm the interests of firms in both countries, Chong Quan, the ministry spokesman, said.

He was referring to the proposed US rule on exports particularly, high-technology products to China, which would require licences for many items not currently controlled. It would affect 47 categories of high-tech products.

The proposal also requires exporters to obtain an import or end-user certificate from China's Ministry of Commerce for all exports of controlled goods and technologies that exceed a total value of US$5,000. In addition, a licence is compulsory for all computer exports to China regardless of value.

US Trade Representative Susan Schwab argued during her visit to Beijing, which ended on Tuesday, that the products affected by the new rules account for only a small proportion of Sino-US trade and would not have a serious impact on overall trade.

However, Chong called on the United States to revise its export control policies.

"We hope the United States will consider China's concerns seriously," he said, adding that easing restrictions on high-tech trade with China would help narrow the trade gap, which tops Washington's concerns in bilateral relations.

"We hope the US will take constructive measures to facilitate the trade of high-tech products. It will not only reduce the current trade imbalance, but also secure healthy growth," Chong said.

Although US exports to China grew an average of 22 per cent annually since China joined the World Trade Organization in December 2001, the trade imbalance between China and the US remains a pressing issue.

Over the past five decades, the United States had seen big trade deficits, first with Europe, then Japan and now China reflecting the change in the country's major trade partners, said Professor Zhang Hanlin, of the University of International Business and Economics.

It also underscores the necessity for the United States to narrow its deficit with China through more open trade in high-tech products, said Zhang.

"When it comes to the trade with China, the United States' comparative advantage in new high-tech products is obvious. If it keeps adding new export controls, the interests of domestic companies will be impaired as much as those of Chinese importers," Zhang said.

Source: China Daily