Feeds

China agrees to drop chip tax rebates

WTO intervention avoided

  • alert
  • submit to reddit

Securing Web Applications Made Simple and Scalable

China has bowed to US pressure and agreed to remove a semiconductor sales tax regime said to favour local chip makers over their foreign rivals.

Today, China imposes a 17 per cent tax on the sale of all semiconductor products. However, domestic vendors are able to request an 11 per cent rebate, rising to 14 per cent if the products were also developed locally.

That, says overseas chip makers, amounts to discrimination and as such runs contrary to World Trade Organisation (WTO) rules - even though China didn't join the WTO until December 2001, long after the rebate regime had been put in place. Even so, in March this year, the US submitted a complaint to the WTO, which put in place a period of negotiation, the results of which were announced today. The US complaint was backed by Europe and Japan/

China will end the rebate, but the 17 per cent sales tax will remain, to be applied to all chips sold, irrespective of their country of origin. The country's agreement to drop the rebate, which it claims it had put in place to aid its fledgling chip industry, will be filed with the WTO next week.

The Semiconductor Industry Association (SIA), the US chip makers' club, welcomed China's move, which it said "will assure a level playing field for all competitors", and the country's "continued efforts to bring its trade laws and regulations into compliance with WTO rules".

The concession announced today marks the second time China has bowed to overseas pressure over rules imposed on overseas technology companies. In April, it agreed to drop a requirement that all wireless networking products sold in China support its Wireless Authentication and Privacy Infrastructure (WAPI) specification. Until it agreed to do so, Intel for one had said it would not ship its wirless products in China.

The SIA calculates that China is already the third-largest country market for semiconductors and is projected to become the second-largest country market before 2010. ®

Related stories

Japan fires shot at Chinese chip tax
Europe backs US protest over China chip tax
China agrees to US chip tax talks
US asks WTO to rule on China's chip tax
US tells China to drop chip sales tax - or else
US chip industry to take on Beijing
SIA calls on China to dismantle chip VAT rules
China agrees to drop WAPI wireless sec spec
US chip biz tells China to ditch local WLAN standard

Build a business case: developing custom apps

More from The Register

next story
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Mobile application security vulnerability report
The alarming realities regarding the sheer number of applications vulnerable to attack, and the most common and easily addressable vulnerability errors.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.