All: Article china gives intel a gift
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China Tears Down Great Wall Of Tariffs
(10/30/97; 6:00 p.m. EST)
By Jack Robertson, Electronic Buyers' News
China President Jiang Zemin gave the electronics
industry a gift on his visit to the United States, agreeing
to lift all his country's tariffs on chips, computers,
telecom products, and semiconductor equipment.
On Wednesday, Pres. Jiang Zemin said China would
join the global Information Technology Agreement
(ITA) that has already been signed by the United
States, Japan, the European Union, South Korea, and
26 other countries. The promised tariff elimination on
most electronic goods is part of China's campaign to be
admitted to the World Trade Organization (WTO).
Lifting tariffs would benefit all electronic exporters
around the world shipping to China. The U.S. industry
would especially benefit, because this country does an
estimated $1.8 billion in electronic trade annually with
China.
U.S. electronic associations were quick to praise the
ITA pledge by the Chinese president. Computer and
telecom equipment tariffs in China range from 7 percent
to 15 percent, while semiconductor duties can be
anywhere from 6 percent to 12 percent. Tariffs on
semiconductor production equipment can be as high as
35 percent -- although in recent years many of these
duties were suspended in a Chinese policy to encourage
capital-equipment investment by foreigners in new fabs.
Computer tariffs may not have had a major impact on
foreign vendors, most of whom set up joint venture
assembly operations with partners in China. It was
unclear how much, if any, duty was levied on parts and
motherboards shipped to these assembly plants in
China.
Similarly, a growing number of chip makers have set up
assembly operations in China for final packaging and
testing of devices, which may have escaped most tariffs.
Intel has a brisk export business selling
"Pentium-In-A-Box" microprocessors to China, which
are then inserted into motherboards for finished PCs.
Such single MPU imports into China would be
subjected to tariffs. This extra cost has been little
deterrent to the booming penetration of Intel chips in the
Chinese PC market. The end of chip tariffs in China
could only boost the Intel thrust further.
It isn't clear if President Jiang's ITA pledge would cause
the Clinton Administration to rethink its present
opposition to China's admission into the WTO. But any
further trade concessions by China could open the door
for U.S. approval, sources said. |
