Dear Johnson,

 

Happy Fourth of July! I’d like to provide an update on the progress the US and China have made regarding export controls as per the agreement recently reached in London.

 

Earlier this week, AmCham Shanghai participated in a briefing in Beijing by the Ministry of Commerce (MOFCOM) on export controls. MOFCOM highlighted its efforts in streamlining approvals for rare earth exports. It noted that while the statutory processing period for such export licenses is 45 working days, the current average review and approval time for applications for US-bound exports is fewer than 20 working days. According to MOFCOM’s Bureau of Industry Security and Export Control, it has approved 310 export license applications for rare earth shipments to the US in the past three months. The applications for third-country destinations by US companies, however, are not processed in the same category.

 

Meanwhile, the US has lifted the licensing requirement (introduced in May) for exporting Electronic Design Automation (EDA) software tools to China. These tools are critical for chip design, testing and validation. Top EDA vendors such as Synopsys, Cadence Design Systems and Siemens have been notified by the US Department of Commerce’s Bureau of Industry and Security of the change. In addition, the US has rescinded licensing requirements set as recently as early June for US ethane producers to export to China. China is a major market for US ethane, a natural gas liquid primarily used to produce ethylene.

 

While it is not clear whether the two sides will try to further roll back tariffs, we are pleased to see measurable progress in easing export controls.

 

Regards,

 

Eric Zheng

President, AmCham Shanghai