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Trade Summit with China Yields Progress on Various Issues

Wednesday, November 23, 2011
Sandler, Travis & Rosenberg Trade Report

A fact sheet issued at the conclusion of the Nov. 20-21 meeting of the U.S.-China Joint Commission on Commerce and Trade in Chengdu, China, indicates that the meeting yielded the following results.


• Chinese authorities have established a State Council-level leadership structure to lead and coordinate intellectual property rights enforcement across China. Through the establishment of this mechanism, China will enhance its ability to crack down on IPR infringement by making permanent the leadership structure under the recent Special IPR Campaign.

• China will continue to take measures to ensure that governments at all levels use only legitimate software, ensuring that all software used by government agencies is licensed. China has requested government agencies at all levels to bring software into state asset management systems and will increase resources devoted to conducting audits and inspections. China will also publish the auditing results to ensure that all types of software used by government agencies are being accurately accounted for. To promote efficiency and accuracy in these audits and inspections, government agencies intend to further improve management of their software assets, including by the use of technical means.

• China has committed to complete the provincial legalization program for all the 31 provincial entities by mid-2012. China also intends to complete the software legalization program for the municipal and county level governments by 2013.

• China will further promote the use of licensed software in enterprises, conduct enterprise software management pilot projects and publish progress reports about these projects.

• China and the U.S. will strengthen engagement on the implementation of software legalization in both government and enterprises.

• China and the U.S. agreed to use the JCCT Intellectual Property Rights Working Group to study investment, tax and other regulatory measures outside of government procurement, with the first phase of study in 2012 covering investment and tax and the second phase in 2013 covering key measures in other areas. The purpose of this study is to determine whether the receipt of government benefits is linked to where intellectual property is owned or developed, or to the licensing of technology by foreign investors to host country entities.

• China and the U.S. also agreed to enhance their cooperative activities on a range of areas, including by (i) implementing a U.S.-China government/industry program in spring 2012 to identify new approaches to combating the sale of infringing hard goods on online markets; (ii) holding government/industry roundtables in China to discuss online copyright protection and enforcement; (iii) enhancing bilateral work to address the issue of bad faith trademark registrations; and (iv) deepening discussions on issues related to patent quality and examination times for invention, utility model and design patents to address specific issues of concern.

Indigenous Innovation

• China announced that the State Council has issued a measure requiring governments of provinces, municipalities and autonomous regions to eliminate by Dec. 1 any catalogues or other measures linking innovation policies to government procurement preferences.

New Energy Vehicles

• China confirmed that it does not and will not maintain measures that mandate the transfer of technology in this sector. Chinese officials clarified that “mastery of core technology” does not require technology transfer for NEVs.

• China also confirmed that the establishment of brands is a corporate decision and that the Chinese government does not and will not impose any requirements for foreign-invested companies to establish domestic brands in China.

• Chinese officials clarified that foreign-invested enterprises are eligible on an equal basis for subsidies or other preferential policies for NEVs with Chinese enterprises, and that these subsidies and preference programs will be implemented in a manner consistent with WTO rules. China also affirmed that as it develops possible future NEV support programs the views of all stakeholders will be considered, including the comments and opinions of the U.S.

Strategic, Newly Emerging Industries

• China made assurances that it will provide a fair and level playing field for all companies, including U.S. companies, in China’s strategic, newly emerging industries. These industries include high-end equipment manufacturing, energy-saving and environmentally-friendly technologies, biotechnologies, new generation information technologies, alternative energy, advanced materials and NEVs.

Medical Devices

• China’s State Food and Drug Administration will issue by June 2012 a complete list of x-ray equipment to be placed in a lower risk classification category and is seeking to release a draft in-vitro diagnostic equipment catalogue for public comment by June 2012.

• The U.S. and China recognized that timely transition from the 2nd edition to the 3rd edition of IEC 60601-1 safety standards for medical devices is an area where they can benefit from closer cooperation and exchange. China’s SFDA is conducting in-depth research and drafting of 3rd edition transition procedures, which will be part of SFDA’s 2012 work plan. The U.S. and China will participate in an information exchange program to take place in 2012.


• Building upon the bilateral discussions at the June 2011 JCCT Roundtable on Regulatory Data Protection, China and the U.S. agreed to conduct more in-depth research and exchanges on how China can establish and implement effective regulatory data protection through the revision of relevant legislative instruments. Future joint activities will explore regulatory data protection’s role in the development of the overall pharmaceutical industry and ensuring patients’ timely access to innovative medicines.

• China announced the establishment and funding of the Complaint Center for Counterfeit Drugs, which includes a consumer hotline, a Web site and a data analysis unit. SFDA is collaborating closely with China’s Ministry of Industry and Information Technology and Ministry of Public Security to monitor and crack down on Web sites involved in the sale and distribution of counterfeit medicines. The U.S. government and the U.S. pharmaceutical industry will share with SFDA instances of counterfeit drugs in China when such information is available.

Smart Grid Technologies

• China indicated that the Standardization Administration of China and the National Energy Administration follow the principles of openness and transparency in the development of national and industry standards and confirmed that foreign entities are welcome to participate in China’s smart grid standards technical committees.

Standards and Conformity Assessment

• In response to a U.S. request to allow participation of non-Chinese entities in the China Compulsory Certification scheme, China agreed to conduct technical exchanges with the U.S. concerning the CCC mark. China also said that it welcomes competent foreign participation in its CCC technical experts group.


• Building on a 2010 JCCT commitment to develop a one-stop shopping mechanism for telecommunications network access license and radio type approval, China agreed to publish these procedures by the end of 2011.

• China intends to publish in draft and allow public comment on the revision to its value-added telecommunications services catalogue.


The U.S. Department of Agriculture and China’s Ministry of Agriculture and General Administration of Quality Supervision, Inspection and Quarantine are finalizing the framework of a five year strategic plan focused on food security, food safety and sustainable agriculture to build a stronger foundation for critical cooperation in agriculture.

Travel and Tourism

• China and the U.S. agreed to expand the memorandum of understanding opening the market for the sale of packaged leisure travel from China to the United States to three additional provinces – Henan, Jiangxi and Guizhou – for a total of 27.

Other issues

• The U.S. and China held a successful U.S.-China Remanufacturing Dialogue in October 2011 and will continue to discuss remanufacturing with participation from all relevant agencies and ministries, industry stakeholders and academic experts from both countries.

• China’s broadcast and television associations and relevant U.S. counterparts will enhance their communications and exchanges concerning broadcast tariff rates with the support of U.S. and Chinese authorities.

• China and the U.S. agreed to reinvigorate the Commercial Law Working Group to promote trade and commerce by addressing commercial law issues. The working group will meet in the U.S. in spring 2012 to focus on enhancing mutual understanding of administrative licensing procedures.

• A cloud computing seminar will be held in the first half of 2012 to exchange best practices in approaches to cloud computing.

• The DOC and MOFCOM announced that a forum will be held on motorcycle use and regulation. The two sides also agreed to discuss specialty auto products including safety, environmental and other regulations, and will hold discussions on the current state of the industry and its market potential.

• China and the U.S. are working cooperatively to advance the communication on drug detection technologies at the APEC Life Sciences Innovation Forum Drug Safety and Detection Technology.

• China and the U.S. also agreed to hold the Sixth U.S.-China Symposium on Postal Reform and Express Delivery Services in 2012 in the U.S.

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