China studying consultation request over chip row (Xinhua) Updated: 2004-04-05 16:30
China is studying the request of the European Union and Japan to join the
United States in the consultations over China's tax policy on semiconductors, an
official with the Ministry of Commerce said in Beijing Monday.
The EU asked for the consultation on March 26 and Japan on March 31, joining
the United States to complain against China's value-added tax on semiconductors.
China agreed to consult with the United States on March 26 after the United
States officially requested the consultation on March 18. The two sides are
working on the timing and venue of the consultation through negotiation,
according to the official, who refused to be identified.
The US administration called China's tax policy on chips "discriminative" to
US chip manufacturers. China levies a 17 percent value-added tax on imported
chips. Domestic producers also are subject to the tax but qualify for rebates of
as much as 14 percent.
Some US manufacturers have claimed that is discriminatory to foreign firms.
China and the United States will have 60 days for consultation and, according
to the rules of World Trade Organization, a further dispute settlement procedure
will be launched if the two sides fail to reach an agreement within the 60-day
time limit.
China is a leading semiconductor market for the United States. US statistics
show that US manufacturers sold up to US$2 billion worth of chips last
year.
