Recent Trade Compliance News

Premier Li says China, Canada begin exploratory talks on free trade agreement

Li made the remarks when meeting with journalists together with his Canadian counterpart, Justin Trudeau, after the two leaders attended the signing ceremony of a series of bilateral cooperation documents.

“We have reached many new consensuses in economic and trade area,” said Li, adding that China is willing to import frozen beef from Canada, and the two sides have reached an agreement on Canada’s canola exports to China.

Li also said that the two sides discussed cooperation in finance, tourism and law enforcement, as well as between their local governments.

“The exchange of visits within one month showed that China-Canada relations are entering a new stage,” said Li who referred to Trudeau’s recent official visit to China, adding that “it’s rare in the bilateral ties, and conforms to the interests of both countries as well as the expectations of the international community.”

Li arrived in Ottawa on September 14, 2016. His visit to Canada is the first by a Chinese premier in 13 years.

The Chinese premier said the two sides agreed that China and Canada have broad common interests and sound cooperation. The development of the bilateral ties is in the interests of both Chinese and Canadian people as well as the world’s peace and stability.

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Tariff cut on IT products to push China’s industrial innovation

BEIJING (Xinhua) — China’s decision to cut tariffs on a wide range of technology products would help push the country’s industrial innovation, analysts pointed out.

On September 22, 2016, China, the world’s largest IT products exporter, started cutting import duties on 201 IT products covered by the Information Technology Agreement (ITA), a global technology trade pact under the World Trade Organization (WTO), according to the Ministry of Finance.

The products include integrated circuits, touch screens, semiconductors and medical devices. The government also promised to reduce tariffs to zero on these products within seven years.

In 2015, over 50 countries, including China, reached an agreement at a WTO meeting in Nairobi, Kenya to begin implementing their tariff commitments to the ITA by July 1, 2016, while the timetable is subject to the completion of each country’s domestic procedural requirements.

China’s legislature passed a bill in September 2016 to ratify an amendment to the ITA.

“The ratification and implementation of the amendment will be in the interests of China’s drive to build an open economic system and to accelerate the development of domestic IT industry amid international competition and cooperation,” said the National People’s Congress Foreign Affairs Committee in a review report to the lawmakers.

The move meant that China would play a bigger role in participating in global resources relocation and move higher in the global industrial value chain thanks to lower import costs, according to Bai Ming, a researcher with the think tank of the Ministry of Commerce.

Global trade of the 201 IT products is valued at US$1.3 trillion, which is approximately 10% of total world trade. China’s foreign trade volume of the goods is approximately one-quarter of the amount, according to Lou Jiwei, head of the Customs Tariff Commission of the State Council. For more information, click on the following link:

China lifts ban on U.S. beef products

On September 22, 2016, Chinese authorities announced the conditional lifting of a 13-year import ban on some U.S. boneless beef and beef on the bone.

The removal of the ban applies to cattle that are under 30 months old, according to a joint statement issued on September 22, 2016 by the Ministry of Agriculture and the General Administration of Quality Supervision, Inspection and Quarantine.

The authorities said China would allow imports of beef that comply with China’s traceability and quarantine requirements.

China has banned imports of most U.S. beef since 2003, partly due to the concerns over the spread of bovine spongiform encephalopathy, also known as “mad cow disease.” The lifting of the ban will be subject to the completion of detailed quarantine requirements, which will be announced at a later date, the statement said.

On September 20, 2016, Premier Li Keqiang told business groups in New York that China would soon resume imports of U.S. beef.

Li’s remark regarding Chinese shoppers soon having a greater choice of beef sparked a rally in U.S. cattle futures, which closed at just under 1% higher at US$1.085 per pound at the Chicago Mercantile Exchange on September 21, 2016.

U.S. cattle futures fell to a six-year low in September 2016 as supplies have expanded in the country, with a glut of cold storage beef, and China offers a potential outlet, The Wall Street Journal reported.

In the first six months of 2016, China imported 295,721 metric tons of beef, jumping 60.8% year-on-year. The value of imported beef reached US$1.3 billion, up 48.3% year-on-year, according to the General Administration of Customs.

Because of rising feed prices, limited grazing land and the breeding cycle, China’s cattle-raising sector lags behind consumer demand, resulting in higher beef prices in the past five years, according to a report by the Chinese Academy of Agricultural Sciences.

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Treasury Imposes Sanctions on Supporters of North Korea’s Weapons of Mass Destruction Proliferation

Action Targets a Company and Four Individuals Facilitating Transactions for Designated North Korean Entity
WASHINGTON – Today the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated one company and four individuals tied to the Government of North Korea’s proliferation of weapons of mass destruction (WMD).  Specifically, OFAC imposed sanctions on Dandong Hongxiang Industrial Development Company Ltd (DHID) for acting for or on behalf of Korea Kwangson Banking Corporation (KKBC), which was previously designated by the United States and the United Nations for providing financial services in support of WMD proliferators.  OFAC also designated Ma Xiaohong, Zhou Jianshu, Hong Jinhua, and Luo Chuanxu for acting for or on behalf of DHID.
These designations were made pursuant to Executive Order (E.O.) 13382, which targets WMD proliferators and their supporters.  As a result of today’s action, any property or interests in property of DHID, Ma Xiaohong, Zhou Jianshu, Hong Jinhua, and Luo Chuanxu in the possession or control of U.S. persons or within the United States are blocked.  Additionally, U.S. persons are generally prohibited from engaging in transactions involving these designated persons.
In a related action, today the U.S. Department of Justice unsealed criminal charges against DHID, Ma Xiaohong, Zhou Jianshu, Hong Jinhua, and Luo Chuanxu for conspiring to evade U.S. economic sanctions and violating OFAC’s Weapons of Mass Destruction Proliferators Sanctions Regulations as well as conspiracy to launder money instruments. Additionally, the U.S. Department of Justice announced the filing of a civil forfeiture action for all funds contained in 25 bank accounts belonging to DHID and its front companies and a request for a restraining order to be sent to China for all of the funds based upon the allegation of the United States that the funds represent property involved in money laundering.
“Today’s action exposes a key illicit network supporting North Korea’s weapons proliferation,” said Adam J. Szubin, acting Under Secretary for Terrorism and Financial Intelligence at the U.S. Department of the Treasury. “DHID and its employees sought to evade U.S. and UN sanctions, facilitating access to the U.S. financial system by a designated entity.  Treasury will take forceful action to pressure North Korea’s proliferation network and to protect the U.S. financial system from abuse.”
OFAC designated China-based DHID for acting for or on behalf of North Korean-based KKBC. Specifically, DHID used an illicit network of front companies, financial facilitators, and trade representatives to facilitate transactions on behalf of KKBC. Ma Xiaohong, Zhou Jianshu, Hong Jinhua, and Luo Chuanxu were designated for acting for or on behalf of DHID.
KKBC was designated by OFAC under E.O. 13382 and the UN pursuant to UN Security Council Resolution (UNSCR) 2270 for providing financial services in support of the previously designated entities Tanchon Commercial Bank and the Korea Hyoksin Trading Corporation.  Both of those entities were designated pursuant to E.O. 13382 and UNSCR 1718 for their roles in North Korea’s WMD and missile programs.
This update was provided by the U.S. Department of the Treasury. Click here for more:

China aircraft maker to promote new generation planes at air show

BEIJING – The Aviation Industry Corp of China (AVIC) will promote its new generation aircraft at China’s upcoming aerospace trade show, the aircraft manufacturer said Thursday.

The company’s heavy transport aircraft Y-20 and stealth fighter J-31, the major models in the new series, will be demonstrated at the 11th China International Aviation and Aerospace Exhibition, which opens on Nov. 1 in the southern port city of Zhuhai, Guangdong Province.

The new planes represent AVIC’s advances toward the fourth generation of aircraft technology, the company said.

In June, the first two Y-20 planes were delivered to the People’s Liberation Army Air Force after nearly a decade of design, manufacture and test flights. With a maximum takeoff weight of around 200 tonnes, the large freighter plane is ideal for transporting cargo and people over long distances in diverse weather conditions.

As a major aerospace and defence company in China, AVIC has developed a series of advanced fighters, helicopters and airborne early warning aircraft, and exported many models.

The six-day air show has been held in Zhuhai every two years since 1996.

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Import growth points to economic stabilization

China’s imports in August rose for the first time in nearly two years while the decline in exports decelerated, signaling that government measures to stabilize growth may have taken effect, experts said on Thursday.

Dollar-denominated imports beat expectations to increase by 1.5 percent year-on-year, reversing a 12.5 percent slump in July.

Exports in dollar terms fell 2.8 percent year-on-year, the slowest pace in four months, according to data from the General Administration of Customs.

Factors including a rebound in commodities prices, improved domestic and overseas demand, and a weaker yuan may have contributed to the better-than-expected trade data in August, experts said.

Guo Yanhong, chief strategist at Founder Securities Co, said that the improved trade data also pointed to the effective government measures to stabilize growth, including expansion of infrastructure projects and strong property sales, which helped lift domestic demand and boost import growth.

Official data showed that China’s iron ore imports jumped 9.3 percent in August from a year earlier, while coal imports rose by 12.4 percent.

“The improvement in imports could last until September but any adjustment in China’s property market could once again weigh on imports,” Guo said.

Zhao Yang, an economist at Nomura Securities Co Ltd, said that the surprising surge in imports in August may be more transient than long-lasting.

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Shanghai wants to be global shipping hub

Shanghai is keen to deepen the reform of becoming a global shipping hub with continuous higher throughput capacity of cargos, upgraded airport construction and comprehensive shipping services in the Yangtze River Delta.

According to the 13th Five-Year Plan on forming Shanghai to be a global shipping center, released today by the municipal government, Shanghai port is expected to remain the leading global pivotal port, with an annual throughput capacity of containers for 42 million TEUs. The annual throughput capacity of passengers’ visits in airports is expected to reach 120 million.

“The under construction of the fourth phase of Yangshan Deep-water Port is an automated terminal project, which will be put in trial production by next year, with an extra 4 million TEUs,” said Zhang Lin, deputy director of the Shanghai Municipal Transportation Commission.

In the cruise industry, Shanghai port is planned to become one of the largest cruise ports in the Asia Pacific region and the home port of more than 12 to 15 cruise ships, with a total number of 1.5 to 2 million visits by tourists.

By the year of 2020, the city aims to become a global shipping hub gathering high-level shipping resources, offering comprehensive shipping services and efficient logistics, and having the capability of resource allocation.

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Exports to China vital to US economy, job growth: USCBC

WASHINGTON, Aug. 18 (Xinhua) — Exports of goods and services to China continue to play an essential role in the U.S. economy and job growth, according to a report released Thursday by the U.S.-China Business Council (USCBC).

U.S. goods exports to China totaled 113 billion U.S. dollars last year, down from the previous two years, but China remained the third-largest export market for American goods, USCBC said in an annual report on U.S. state exports to China.

The report noted that the rapid growth in U.S. services exports to China is an important new development of bilateral economic relationship. In 2014, the most recent complete year of available data, U.S. service exports to China reached 42 billion dollars, making China the United States’ fourth-largest services export market.

Despite of a slowdown in China’s economy and trade growth, “U.S. exports of goods and services to China have grown faster than exports to any other major U.S. trading partner over the past decade”, the report said.

U.S. goods exports to China increased 115 percent from 2006 to 2015, while U.S. services exports to China increased more than 300 percent from 2006 to 2014, according to the USCBC.

“Most states have seen significant increases in exports of goods and services to China since 2006,” the report said, adding that thirty-one states experienced at least triple-digit goods export growth to China in the past decade and every U.S. state had triple-digit services export growth to China over the same period.

The report also noted that exports of goods and services to China helped support a wide range of industries including transportation equipment, agriculture, computers and electronics, chemicals, travel and education, business and professional services, and financial services in the United States.

While China is a significant market for American exports, the U.S. has a small share of China’s overall market. U.S. goods accounted for only 6.5 percent of China’s total imports last year, the report said, urging the United States to push forward negotiations with China on a high-standard bilateral investment treaty, which would facilitate and expand U.S. exports to China.

The two countries have held 26 rounds of investment treaty talks since negotiations started in 2008. China and U.S. officials have signaled a willingness to finalize a deal before U.S. President Barack Obama leaves the White House in January 2017.

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China to Levy Duties on Some Exports from US, Japan

BEIJING – China will levy antidumping duties on imports of iron based amorphous alloy ribbon from the United States and Japan by requiring deposits for such imports, the Ministry of Commerce said on Thursday.

The move came after the initial findings of an investigation launched late last year showed evidence of dumping, according to the ministry’s website.

Importers will be required to pay customs deposit fees ranging from 25.9 percent to 48.5percent according to the level of dumping.

The ministry did not specify when the measure will take effect.

In November, when China announced its investigation into the sales of iron based amorphous alloy ribbon from US and Japan, it said the probe was likely to end before Nov 18, 2016, but could be extended to May 18, 2017.

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U.S. punitive duties on solar imports from China disrupt industry chain: MOC

The Ministry of Commerce (MOC) on Tuesday said China was disappointed at the United States’ punitive duties on Chinese solar products, saying the practice disrupted the global industry chain.
“We were disappointed by our U.S. counterpart as we believe its constant anti-dumping and anti-subsidy measures on Chinese photovoltaic products has seriously disrupted the development of the global industry chain,” said MOC spokesperson Shen Danyang during a routine press conference.
The U.S. Commerce Department decided recently to levy anti-dumping duties ranging from 6.12 percent to 12.19 percent and countervailing duties of 19.2 percent on imports of photovoltaic products from China.
Photovoltaic products are beneficial to environmental protection and pollution reduction. With relatively advanced technology, China has developed lot of quality photovoltaic products and services, while importing a large amount of raw materials and equipment, Shen said.
In this respect, and as major photovoltaic markets, China and the U.S. have a promising cooperation future, he said.
Shen said he hopes to enhance dialogue and consultation with relevant countries, including the United States, to solve trade frictions in this field via industrial cooperation to contribute to global climate change tasks.