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In Defense Of China's Chip Policy
By Technology Daily Staff U.S. manufacturers of computer chips are upset about China's tax policy on semiconductors from non-Chinese firms, but the practice is part of a larger strategic goal that is a central tenet of China's economic and national defense plans, an industry official said Wednesday.
U.S. Trade Representative Robert Zoellick in early March filed a World Trade Organization case against China's policy of granting tax rebates for semiconductors made by Chinese firms. The rebates can lower tax rates to as little as 3 percent. Foreign manufacturers who sell their chips in China, by contrast, are subject to a 17 percent tax.
"China's goal is self-reliance in the semiconductor industry," Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council, said at a meeting convened by the Global Business Dialogue, an international trade group. The Chinese government's reasoning for the policy is to foster all the kinds of development that semiconductors enable in the defense arena, nanotechnology and other high-tech industries that require intensive computing power, he said.
In addition, Chinese firms that make goods such as automobiles and flat-screen televisions with semiconductors inside of them want quick and close access to locally produced chips, Hammond-Chambers said. "Having domestic chip production serves a growing need and a growing market," he said. "It's enormously important that factory production should be close and reduces costs."
In fact, many of the customers of the Chinese chipmakers are foreign companies that have or want local production facilities in China, he said. "Development of the chip sector in China allows domestic companies to compete in the global IT market by producing chips close to their customers -- specifically European, Japanese, Korean, Taiwanese and U.S. businesses, all of whom have facilities in China," Hammond-Chambers said.
Among a panel of participants, he was the lone voice that tried to explain China's position. The others strongly criticized China's industrial policies and their effect on U.S. exports.
U.S. Officials Anticipate Chinese Action On Piracy
U.S. officials hope China will take stricter action against its rampant piracy problem after next week's U.S.-China trade meeting in Washington, Reuters reports.
The United States wants China to agree on specific "guideposts" for measuring its progress in reducing piracy, Commerce Undersecretary for International Trade Grant Aldonas said Tuesday. Asked if next week's meeting could result in actual Chinese purchases of U.S. software, Aldonas said: "I hope so. But that's in play right now in terms of our discussions with the Chinese."
He acknowledged that there has been "an awful lot of pushing and shoving" between U.S. and Chinese officials in the weeks leading up to the meeting of the U.S.-China Joint Commission on Commerce and Trade.
In other China news, U.S. Trade Representative Robert Zoellick on Wednesday announced a separate and expanded office for China trade affairs. In the omnibus appropriations package for 2004, additional funds were provided for the new office, which will be responsible for trade with the China, Taiwan, Hong Kong, Macau and Mongolia.
The Chinese government also is seeking new security technologies from overseas vendors and sponsoring a business delegation to the United States next month to meet with vendors and view their proposals. The goal is to bolster security for the Beijing 2008 Summer Olympic Games.
Japanese Officials Raid Three Intel Offices
Microsoft may not be the only leading American high-tech company to face charges of anti-competitive behavior overseas. Agents from Japan's Fair Trade Commission raided three of Intel's offices last Thursday, including its divisional headquarters in Tokyo, according to BusinessWeek Online.
Intel rival Advanced Micro Devices prompted the inquiry. AMD's share of the computer chip market has remained at 12 percent the past three years, even though its average selling prices often are less than those of Intel chips. AMD CEO Hector de Jesus Ruiz told BusinessWeek that Intel threatened personal-computer makers with retaliation if they switched to AMD's new line of 64-bit chips released last year. An Intel spokesman denied the charges, noting that the U.S. FTC investigated Intel twice in the 1990s and took no action.
Microsoft, meanwhile, joined the World DAB Forum this month. The forum is an international group of about 80 organizations dedicated to developing digital audio broadcasting (DAB) technology. Microsoft will work to more quickly deploy DAB-based devices and services, many of which can deliver text, data, pictures and video using radio signals.
The State Of Global Internet Connectivity
The International Telecommunication Union is conducting a survey to determine the importance of targets for improving connectivity and access to the Internet that were agreed upon last year.
The union, which is part of World Summit on the Information Society (WSIS), said on Wednesday that its objectives are to "build an inclusive information society" and to use information and knowledge to help develop countries. More than 170 countries agreed to targets drafted during the December WSIS summit in Geneva.
The survey asks participants to rank the importance of specific targets to provide access and connectivity technologies to universities, colleges, secondary schools and primary schools; scientific and research centers; health centers and hospitals; and local and central government departments, among other others.
Telecom executives, meanwhile, will assemble in Cairo, Egypt, from May 4 to 8 for an ITU conference on the telecom market in the region. Exhibitors will include Cisco Systems, Oracle, Siemens and Vodafone.
Europe Adopts Rules On Sharing Technology
The European Commission this month adopted new rules that will allow European companies to share technology and intellectual property when competing companies do not control more than 20 percent of the market and when non-competitors do not control more than 30 percent.
"It is important to find the right balance between protecting competition and protecting intellectual property rights," the commission said in a statement. The ruling "will facilitate wide dissemination of innovation and give companies greater scope and design freedom," European Union Competition Commissioner Mario Monti said in release.
Elsewhere in Europe, a wireless industry executive for a firm based in the United Kingdom claims that many wireless networks in England are "flouting" government regulations, ZDNet reports. Paul Munnery, the managing director of Wireless CNP, which designs and installs wireless networks, made the charge at a Wireless LAN Event in London. He said many companies are breaking the law --some unwittingly -- by running at 5.8 gigahertz without the spectrum restrictions originally set by the communications watchdog Ofcom.
NAFTA Countries Prep For IT Disasters
Businesses in countries governed by the North American Free Trade Agreement (NAFTA) are far more likely than those in other regions to have formal plans for addressing failures in information technology, according to a recent study by the consulting firm Grant Thornton International.
The poll of 6,900 businesses about their risk strategies found that 82 percent of businesses in NAFTA countries had formal plans for IT failure, compared with only 25 percent of Asian businesses. Overall, more companies had written plans for IT disaster than any other form of problem, the study found, with 63 percent of respondents having IT plans, followed by loss or destruction of property at 62 percent and succession planning at 47 percent.
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