战略与国际研究中心-Beyond-the-Whiplash-of-the-ZTE-Deal_10页_884kb

Summary of Dean Garfield's Written Testimony on Market Access Challenges in China

Introduction

Dean Garfield, President and CEO of the Information Technology Industry Council (ITI), testified before the U.S. Senate Committee on Finance, Subcommittee on International Trade, Customs, and Global Competitiveness on April 11, 2018. ITI represents over 60 leading ICT companies and serves as a global advocate for the technology sector. Garfield emphasized the importance of addressing market access challenges in China while also ensuring that U.S. companies remain competitive and innovative.

Key Problems Foreign Tech Companies Face in the Chinese Market

• Data Localization Requirements: China mandates that data be stored and processed within the country, creating barriers for cross-border data flows essential to digital trade.
• Cloud Services Restrictions: U.S. cloud service providers face stringent requirements that could force them to transfer intellectual property, brand names, and operational control to Chinese entities.
• Intrusive Security Review Regimes: Ambiguous and broad security review processes allow for potential exposure of source code and intellectual property, often favoring domestic companies.
• Technology Transfer Requirements: Chinese laws and regulations often require foreign firms to establish joint ventures with local partners or locate production in China, risking the disclosure of sensitive information.
• "China-unique" Standards: China has developed a large number of standards that favor domestic companies and may conflict with international norms and WTO obligations.

Why Do Companies Stay in the Chinese Market?

• Market Size: China represents a significant portion of the global ICT market, with U.S. exports reaching $23 billion in 2017.
• Global Supply Chain Integration: Many U.S. companies rely on China for components and services, making it difficult to withdraw entirely.
• Customer Expectations: Customers expect U.S. companies to provide services globally, and losing access to China could lead to ceding market share to Chinese firms.
• Profitability and Strategic Importance: Despite risks, China remains an important and profitable market for U.S. companies.

What the U.S. Government Can Do

Do No Harm to U.S. Consumers and Businesses

• Tariffs: Broad tariffs on Chinese goods could increase costs for U.S. consumers and businesses, harming the economy.
• Consumer Goods: Even if claimed exempt, consumer goods are often impacted due to global supply chains.

Don't Go It Alone – Leverage International Pressure and Coalitions

• Multilateral Approach: International pressure, such as that from the WTO, ISO, and global governments, has historically been effective in influencing China's policies.
• Examples: The rejection of WAPI as an international standard and the suspension of the "Green Dam-Youth Escort" software were results of coordinated international efforts.

Compete with China and Invest in Our Future

• Invest in Innovation: The U.S. must invest in research and development, education, and emerging technologies like AI to maintain its global edge.
• Data on Investment: China outspends the U.S. in AI investment and has a larger pool of STEM graduates, indicating a strategic effort to lead in technology.
• Global Competitiveness: The U.S. must not only respond to China's unfair practices but also strengthen its own technological and economic capabilities.

Conclusion

Garfield stressed that while the U.S. must take a firm stance against China's unfair trade practices, it must do so in a way that avoids harming American consumers and businesses. He called for a strategic, multi-faceted approach to address China's market access issues, emphasizing the need for U.S. investment in innovation and technology. China's role in the global economy as a key supplier and market cannot be ignored, and the U.S. must balance firm action with a commitment to its own technological future.