Technology contracts worth billions signed between Chinese and
American firms on Tuesday in Washington are yet another step to
reduce the huge trade deficit between the countries, but the United
States could take more steps to narrow the gap, a senior Chinese
official said.
Lou Qinjian, vice-minister of the Ministry of Information
Industry said at the contract-signing ceremony: "If the US relaxed
strict controls on high-tech exports to China, there would be a
definite decrease in the trade deficit."
The US has export controls on goods that could have potential
military uses.
US Commerce Secretary Don Evans said the "agreements will help
generate corporate revenue, and will support high-tech
manufacturing jobs in many American communities."
Competitively priced Chinese products have partly been blamed
for the job losses in the US, a sensitive issue "specially in an
election year.
Evans said the technology deals were "another clear
demonstration of the growing economic and trade relationships
between the two countries."
Among the deals done on Tuesday:
Motorola signed a US$556 million one-year contract to upgrade
China Unicom's GSM network and expand its CDMA network.
The company also clinched a US$510 million contract with China
Mobile to expand its GSM network and improve data services in
Beijing and 13 provinces. The work is scheduled for completion by
the year-end.
Lucent Technologies signed contracts with China Unicom and China
Telecom Corp Ltd worth more than US$350 million.
UTStarcom signed a US$200 million contract for
telecommunications-access equipment in 12 provinces.
Ericsson signed a US$93 million contract with China Unicom for
infrastructure expansion.
Analysts said the slew of deals, apart from reducing the trade
deficit; reflect enhanced trade in the IT sector.
"The purchases are a reflection of domestic enterprises' need to
further expand their businesses, as many local firms are not able
to provide high-tech equipment," said Chen Jinqiao, director of the
China Academy of Telecommunications Research under the Ministry of
Information Industry (MII).
But he sounded a note of caution.
"The large amount of purchases may also have some negative
impact on the research and development of domestic enterprises," he
said.
"We have long been in an unfavorable position in international
competitiveness due to a lack of key technologies, though we have
many advantages such as cheap labor costs.
"Therefore we should work harder to enhance our research and
development."
He also called on the United States to loosen controls on the
transfer of technology.
Analysts agree that the equipment sales are the latest in a
series of high-profile deals to offset the trade surplus between
the two sides.
In the last two months, Chinese enterprises inked deals worth
close to US$9 billion with American giants such as General
Electric, General Motors and Boeing; and agricultural-produce
contracts.
(China Daily January 15, 2004)
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