2018NORTH AMERICA
China issues 2nd warning for Chrysler Jeep China’s top quality watchdog on November 16 issued its second warning regarding potential safety hazards in U.S. automaker Chrysler’s Jeep Wrangler vehicles, urging the company to fix the problem as soon as possible, according to Xinhua. Overheated transmission systems have recently caused several fires in the vehicles, according to Li Yuanping, a spokesman with the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). AQSIQ previously issued a warning after suspending imports of Jeep Wranglers in April over the same problem. From May this year, Chrysler began to recall 8,309 Jeep Wrangler vehicles sold on the Chinese mainland and offer free repairs for faulty transmission systems. Although Chrysler has taken action to reduce overheating hazards, some risks still exist in related vehicle models, Li said. AQSIQ urges car owners to contact local Chrysler dealers for repairs, while those who have already had their vehicles fitted with related devices against the overheating problem should be wary of risks that may still exist, he said. Chrysler should find the root cause of the fires and fix the problem at its source, Li said. US urged to ease high-tech export control The United States needs to ease its control of high-tech products to China to advance trade and investment, Chinese Ambassador to the US Zhang Yesui said November 19, according to Xinhua. Speaking at the first China General Chamber of Commerce-USA Annual Gala, Zhang told business leaders from both countries that US exports to China, which accounted for less than 7 percent of China’s total imports, was not compatible with the status of the overall bilateral relationship and China’s demand. According to research results, consumption in China would be growing at a fairly fast pace in the next five years and total imports were expected to reach more than $8 trillion as the Chinese government intensified efforts to expand domestic demand. But US exports to China were growing slowly, and the proportion of US high-tech products in China’s overall hightech imports had been declining considerably, from 18.3 percent in 2001 to only 7.1 percent in 2010. China would have a $600 billion market for civil aviation, integrated circuits, machine tools and other products by 2020. But most of these products fell under the US export control regime, Zhang said. The ambassador also said China-US business ties had brought tangible benefits to the peoples of both countries over the past four decades. “It is estimated that between 2001 and 2007 alone, US exports to China brought about 2.5 million new jobs to the US,” Zhang said. According to a Morgan Stanley report, four to eight million domestic jobs are closely associated with China-US trade. Meanwhile, US imports of Chinese high-quality but inexpensive products had saved American consumers more than $600 billion in the past 10 years, which had helped boost economic growth and lower inflation in the US, he said. He expressed hope the US side could take steps to provide an open and friendly environment for Chinese investment, which would serve both countries’ interests. US solar cell spotlight on ministry The Chinese Ministry of Commerce will be asked, by domestic manufacturers, to launch a dumping and subsidy investigation into sales of US solar cells in China, China Daily reported on November 21. Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance, told China Daily on November 20 that the alliance is finalizing a complaint alleging that US manufacturers are selling their products at prices below cost in China. Gao added that the alliance is also preparing another petition for the ministry regarding an investigation into subsidies allegedly received by US manufacturers. The ministry declined to make any comment on the issue on November 20. The move is apparently in response to the US antidumping investigation into the export practices of Chinese solar cell manufacturers. SolarWorld AG, and several other US-based solar cell companies, filed a petition in October with the US Department of Commerce and the International Trade Commission, alleging that Chinese companies sold solar panels below cost in the US market. The US Department of Commerce and the International Trade Commission officially opened the year-long investigation in November. Polysilicon is a vital component of solar cells and Gao believes that foreign companies have slashed prices of this key product to force Chinese companies out of business. Foreign countries, led by the United States, dumped 47,500 tons of polysilicon in China in 2010, 20,000 tons more than the previous year, according to statistics from the alliance. In August, China imported 6,473 tons of polysilicon and in September 6,489 tons, a monthly record high in recent years. Meanwhile, US solar companies are receiving large subsidies from the US government, Gao claimed. Hemlock Semiconductor Group, a US-based polysilicon company, got about $169 million in subsidies in 2010 and Renewable Energy Corporation got $155 million in subsidies for polysilicon production, she claimed. US “house-for-visa” bill under fire A bill proposed by two U.S. senators late October which seeks to tempt foreigners into buying houses with the promise of residence visas has been fiercely criticized in China, according to the Beijing News. The bipartisan proposal, if passed, would offer a threeyear residence visa to foreign buyers who make an all-cash investment of at least $500,000 in a U.S. home. Investors can either spend the entire amount on a primary residence, or purchase a house worth $250,000 and invest the remainder in another rentable residential property. However, the bill includes some restrictive measures. Foreigners immigrating with the new visa can bring their spouse, along with children under the age of 18 to the U.S. However, they will not be eligible to work unless they obtain a regular work visa through the normal visa process. They should live in the U.S. for at least 180 days per year, and pay income tax on all foreign earnings. Furthermore, they won’t be eligible for medicare or social security benefits, and will lose the visa if they sell the property. The proposal, supported by such noted celebrities as Warren Buffett, has been criticized for mainly targeting Chinese investors. The proposal has aroused interest among potential Chinese buyers, with some even inquiring whether home-ownership status immediately confers permanent U.S. residence via the green card. Shao Shiwei, a real estate advisor with the HM (Beijing) International Investment Consulting Co., said that hype surrounding the proposal was causing confusion about its specifics. Shao commented that the true purpose of the policy, which grants only a three-year residence visa for $500,000, is to woo Chinese investors to spend more in the U.S. “You buy a house there, but are not allowed to work. You have to remain a consumer and pay property tax at a rate of 1-3 percent annually,” he said. Shao added that buyers who hoped to settle in the U.S. should be cautious and act according to their financial conditions and real needs. Chinese scholar Zhang Bo expressed skepticism regarding the bill’s apparently friendly intention to attract Chinese nationals to live in the U.S. According to Zhang, the bill has been crafted purely out of self-interest. “In short, the U.S. is expecting other countries, especially China, to spend more in the country to help it shake off the economic downturn,” he said. Some U.S. Internet users have expressed concerns that the new visa policy would exert added pressure on the already strained U.S. jobs market, as it is likely to attract many foreigners looking to stay in the country for a long time. These people would, in turn, apply for work visas. A U.S. student now studying in Beijing, with the Chinese name of Yang Siyu, said that many Americans remained skeptical about the bill’s feasibility, and some even had strong objections. He stated that most Americans are worried that criminals may use the opportunities created by this policy to turn the country into a haven for money-laundering or risk aversion. Goldman offloads part of its stake in ICBC Goldman Sachs Group Inc is raising as much as $1.54 billion by selling part of its stake in Industrial & Commercial Bank of China Ltd, according to China Daily report on November 10. The sale comes after shares of the nation’s largest lender rebounded from a near three-year low. Goldman Sachs is offering 2.4 billion shares in ICBC at HK$4.88 (63 cents) to HK$5 each, according to terms for the transaction obtained by Bloomberg News. That’s a discount of as much as 6 percent to Beijing-based ICBC’s closing price in Hong Kong on November 9. ICBC shares have jumped 48 percent to HK$5.19 since falling to HK$3.50 on Oct 4, the lowest since March 2009. Chinese bank stocks rallied in October after the government started buying shares in State-owned lenders that had been pummeled by concerns that bad loans may increase. The sale marks Goldman Sachs’s third divestment of shares in ICBC, as the New York-based firm trims an investment it first made in 2006 before the Chinese bank’s IPO. Lenders, including Bank of America Corp, have also cut their stakes in Chinese lenders, unwinding bets that earned them billions of dollars in profits. Goldman Sachs will own 7.9 billion shares in ICBC after the sale, according to data compiled by Bloomberg. ICBC President Yang Kaisheng said Goldman’s plan to sell the shares isn’t a reflection of its valuation of ICBC’s stock. The sale was to raise funds for internal “adjustments”Goldman is undertaking, Yang said.
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