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due to the absence of a U.S.-PRC bilateral maritime agreement and the unresolved linked issues of blocked assets and private claims. There is no direct regularly scheduled shipping line between the two countries. Except for large bulk shipments such as agricultural commodities and minerals, most commodities are either transshipped in Hong Kong or Japan or they are delivered by tramp steamers making several calls as the need arises.
The rapid growth of China's trade has imposed heavy requirements on China's fleet and port facilities. Delays due to loading and unloading have not been uncommon although the difficulties have eased as China's maritime facilities have been modernized. The problem of timely delivery has been particularly acute for U.S. firms partly because U.S. -China trade has been so recently resumed and partly because of the lack of regular shipping schedules. This problem seems to be moderating as experience is gained and as more ships have begun to arrive on a more regular basis. A hopeful sign for the future is that China has begun to introduce containerization in a few of its ports. Containers used in U.S. China trade will for the most part have to be transhipped in Hong Kong and Japan, but it should make the problem of combining many smaller shipments more manageable. Also, FTCs have shown some willingness to ship U.S.-bound commodities to Hong Kong. This allows businessmen to obtain control over shipping at that point.
U.S. Regulations Governing Trade with the PRC
With the exception of certain embargoed furs (ermine, fox, kolinsky, marten, mink, muskrat, and weasel furs and skins, dressed or undressed), goods may be imported into the United States from the People's Republic of China subject to the same general rules that apply to imports from other countries (i.e., proper labeling, food and drug regulations, etc.). Goods imported from the PRC, however, are dutiable at rates listed in column II of the Tariff Schedules of the United States. These rates are generally higher than those on goods from countries with which the United States has a reciprocal most-favored-nation (MEN) tariff agreement (Column I rates).
Information regarding the duties applicable to specific goods may be obtained by sending
an adequately detailed description of the goods in question to the U.S. Bureau of Customs, 1301 Constitution Avenue, N.W., Washington, D.C. 20229.
Importers should be aware of the regulations of the Department of Agriculture, Food and Drug Administration, and other agencies of the United States applicable to imports from all destinations.
U.S. exports to China and other Communist destinations are subject to controls provided for by the Export Administration Act of 1969, as amended by the Equal Export Opportunity Act of 1972. One purpose of this legislation is to authorize controls over the export of goods and technology that would contribute to the military potential of these countries to the jeopardy of U.S. national security. The legislation also declares it to be the policy of the United States to encourage trade in non-sensitive items with all nations, including China, with whom we have diplomatic or trading relations.
For detailed information on licensing requirements U.S. exporters should consult the Export Administration Regulations and supplementary Export Administration Bulletins at any U.S. Department of Commerce district office in 43 major U.S. cities. Included in the Regulations is the Commodity Control List (CCL); this is the key to determining whether a specific shipment may be exported under an established general license authorization, or whether a validated license is needed. A validated license is required for those commodity groupings designated by a "Y", the country category for China and most countries of Eastern Europe, including the USSR.
Once it has been determined that a validated export license is required for a specific export, an application for the license should be submitted to the Office of Export Administration (Attn: Rm. 1617-M), U.S. Department of Commerce, Washington, D.C. 20230. An application consists of completed Form DIB622, Application for Export License, and Form DIB-623, Application Processing Card. These forms can be obtained free of charge from any U.S. Department of Commerce district office.
U.S. firms are encouraged to contact the Office of Export Administration for information on export licensing, including pending
transactions. Telephone inquiries may be directed to the Exporter Services: (202) 3774811. While no official determination on licensing can be made before formal application is filed, the Office of Export Administration can often informally indicate the prospects for issuing a license.
Outside of domestic short supply and foreign policy considerations, the principal criterion in reviewing license applications is whether the technical data or commodity is designed for, intended for, or could be applied to a significant military use. Availability of comparable foreign-made equipment is also taken into account. The cases most difficult to assess from the standpoint of strategic implications are subject to review by other interested U.S. Government agencies. Export applications for certain commodities must finally be submitted for approval to the Coordinating Committee for East-West Trade Policy (COCOM), a group of delegates from Japan and the NATO countries, except for Iceland.
The Equal Export Opportunity Act of 1972 further provides that representatives of a particular industry may request the Secretary of Commerce to appoint a Technical Advisory Committee in that industry to consult with the Office of Export Administration on licensing requirements and procedures. Such committees have already been established for manufacturers of computer systems; computer peripherals, components and related test equipment; semiconductors; semiconductor manufacturing and test equipment; numerically controlled machine tools; telecommunications equipment; and electronic instrumentation.
Financial Restrictions and Assistance
The provisions of the Johnson Act which prohibits all private U.S. individuals, partnerships, corporations or associations from certain types of financial transactions with any foreign government or agency in default in the payments of its obligations to the United States Government may apply to the PRC.
On May 9, 1967, an advisory opinion by the Attorney General clarified the application of the Johnson Act to private financing of exports to those countries affected by the Act. The opinion stated that the Johnson Act does not prohibit export financing by U.S. firms or banking institutions if the terms of such transactions are based on bona fide business
considerations and do not involve a public distribution of securities.
Prior to this opinion, there was uncertainty whether certain financial transactions connectioned with exports, such as lines of credit, barter transactions, and deferred payments, were proscribed by the Act. The opinion makes it clear that the Johnson Act is not intended to restrict such credit arrange ments so long as they are comparable with those commonly given for export of the same commodities to other countries.
Imports by the PRC
China has a customs administration and a published schedule of tariffs embodying most favored nation and ordinary (higher) rates. However, for purposes of U.S. exporters, im port licensing, customs formalities and tariffs do not exist as processes separate from the conclusion of contracts and need not concern the potential exporter. Foreign visitors to China are assessed duties on goods brought in for personal use in excess of specified nominal duty-free amounts (see Section on Personal and Prohibited items).
Trademarks, Inventions and
China is not party to any multilateral or bilateral treaty with the United States relative to the protection of patents, trademarks or copyrights.
"Measures for the Control of Trade Marks," issued by the PRC April 10, 1963, and supplementary "Enforcement Rules," issued April 25, 1963, govern trademark protec tion in that country. Foreign firms must file all trademark applications through the China Council for the Promotion of International Trade (CCPIT) in Peking as their designated agent to comply with trademark procedures.
Registration of a trademark is granted to the first applicant. Marks registered by local enterprises have no fixed duration; they are valid until withdrawn by the registrant. Marks registered by foreign parties are ef fected for periods of 10 years and renewable for further 10 year periods. The owner of a registered trademark acquires the exclusive
right to its use in the PRC. Registered foreign-owned trademarks may be assigned to other foreigners provided the latter meet the same requirements, noted below, as the original applicant.
A foreigner may apply for a trademark registration only if (1) a reciprocal agreement on registration of trademarks exists between his country and the PRC and (2) his mark is already registered by him in his home country. Since there is no reciprocal agreement on trademarks between the United States and PRC, U.S. nationals cannot register their marks in that country. Presently, Canada, the United Kingdom, Sweden, Switzerland, Denmark, Finland, Italy, Belgium, Luxembourg, Netherlands, West Germany, New Zealand, Australia, East Germany, Norway, Czechoslovakia, and Hungary have reciprocal trademark registration agreements with the PRC. It may be possible, therefore, for a U.S. firm that has a subsidiary in any of these countries to assign its mark in that country to the subsidiary, register the mark in that country, if it has not already done so, and then have the subsidiary apply for registration of the mark in its own name to the PRC.
Other salient features of the PRC's "Trade Marks Measures and Rules" follow. Not registrable are words or markings similar to China's national flag or other official emblems or medals, similar to national flags or emblems of other countries, similar to marking of the Red Cross or Red Crescent and those "which have an ill effect politically." There are no opposition provisions, nor time limit for governmental processing of applications. A trademark registration may be cancelled where the quality of the product does not meet governmental requirements, where it is altered without governmental authority, where a registration has not been used for 1 full year and no permission for such non-use has been granted, and where a third party applies for cancellation and, after examination of the reasons for this request by the Government, it approves the cancellation. For trademark registration purposes, there are 78 classes of goods. An application for a trademark for a medical product must be accompanied by a certificate approving the product's manufacture issued by the Health Department. No foreign language may be used for trademarks on goods used in the PRC. Trademarks with foreign languages may be used for export goods.
The PRC has no patent law. Procedures governing recognition of inventions and technology for use and compensation are embodied in the "Regulations on Awards for Inventions" and "Regulations on Awards for Technical Improvements," approved October 23, 1963, by the PRC State Council. These regulations abrogated earlier Rules of 1950 and 1954 which had provided for certain patent rights. The new "Regulations" establish a system under which a party may apply to the State for official recognition of his invention or technical improvement. Should the State find his invention useful, the party is granted a registered certificate and given cash awards, and perhaps other bonuses based on the invention's use and value to the State. Technical improvements, if adopted, also qualify for cash awards and "commendation" based on their use. The State retains ownership of all such inventions and technology. Foreigners may apply and qualify for the above certificates and awards for their inventions and technology. There is no indication in the "Regulations" whether payments to foreigners are remittable. The PRC reserves the right to sell to foreigners, through its Ministry of Foreign Trade, those inventions which are authorized for sale by the State Scientific Commission.
Although there is no patent protection per se available to foreign firms in China, the Chinese have shown some willingness, on a case by case basis, to give contractual assurances to limit the use of the seller's technology within China and to prohibit the reexport of the technology to third countries.
The PRC has not joined the Universal Copyright Convention or Berne Copyright Convention, or concluded any bilateral copyright protection agreement with the United States. So far as is known, U.S. authors have no copyright protection available in the PRC for their works first published outside that country. Thus, U.S.-authored books, plays, music and other literary and artistic works presumably may be freely copied, translated and reproduced in the PRC without authorization from the U.S. copyright owner or compensation to him. For further information on the PRC's laws on the above subjects, contact the Foreign Business Practices Division, Office of
International Finance and Investment, U.S. Department of Commerce, Washington, D.C. 20230.
Going to the PRC
The PRC may be reached by the following international air service: Japan Air Lines, Pakistan International, Ethiopian, and Iran Air, each twice weekly to Peking and Swiss Air, Aeroflot, Tarom, and Air France, once a week; Swiss Air, Pakistan International, and Japan Air Lines, once a week to Shanghai. The Chinese airline, CAAC, serves Tokyo, Moscow, Paris, Teheran, Karachi, Bucharest, and Tirana. There are no international flights to Canton, site of the semi-annual Kwangchow Fair; connections must be made in Peking or Shanghai with domestic CAAC flights. As noted in the section on the Fair, the usual procedure used to reach Canton is by train from Hong Kong.
Visa applications may be made through the PRC Liaison Office in Washington, D.C. (normally allow 3 days for receipt) or through the China Travel Service (CTS) in Hong Kong or Kowloon (normally allow 4 days for receipt). Two copies of the visa form and four passport-sized photos are required.
In addition to the visa, an invitation to visit China is usually required. Persons who have applied for visas and have not yet received them prior to arrival in Hong Kong should produce evidence that their visit has the concurrence of an official organization in China. Without such evidence, an invitation from the appropriate Chinese authorities must be negotiated, a process which could take considerable time.
For American travelers an International Vaccination Certificate bearing current smallpox and cholera entries is necessary; however, if a traveler is coming from areas where other diseases are endemic, appropriate inoculations may be required.
The Chinese Travel Service in Hong Kong or the inbound airline provides declaration forms for personal effects and the amounts of
foreign currency to be taken into China. U.S. currency may be carried into China. The "declaration of foreign currencies" is held at customs until verified and is necessary for the exchange of travelers's checks or cash for Chinese currency. Foreign currency (including American dollars and traveler's checks) may be changed into Chinese Renminbi in the People's Bank of China located in the customs building at the border, and at appropriate locations within the country. Care should be exercised to keep receipts for money changed as an accounting is required at time of exit.
Personal and Prohibited Items
Personal items essential to the visitor during his trip and in reasonable quantity may be brought into China. Small amounts of medicines, up to four bottles of foreign liquor, and up to 600 cigarettes may be brought in for personal consumption. Visitors may also receive medicines, liquor, or cigarettes through the mail, but the total value each time should not exceed 50 RMB; for visitors from Hong Kong and Macao the amount should not exceed 20 RMB.
Visitors may bring in a typewriter, a tape recorder, a film projector (only 8 mm type), a copying machine, and similar items necessary for conducting business in China. Such items will be exempt from customs duties if taken out of China on departure.
Certain items are prohibited entry into China including Chinese national currency, lottery or raffle tickets, and any books, journals, films, and tapes, which would be harmful to or cast aspersion on Chinese politics, culture and morals. Such items are subject to confiscation before entry.
Visiting in the PRC
Domestic air service consists of regular CAAC air flights within the PRC. Trains are comfortable and efficient, although long distances may be involved. It takes 24 hours from Kwangchow (Canton) to Shanghai, and 36 hours from Kwangchow to Peking. Within the cities, taxis are available. Fare is usually 60 fen per kilometer but can vary. There is a minimum charge for 2 kilometers. Since it is impossible to hail a taxi from the street, it is advisable to keep one's taxi for short shopping trips, or arrange with the hotel to be met by one following meetings.
Reservations can be made through the China Travel Service but frequently the host organization in the PRC selects one hotel. Hotels are the Hsin Chiao and the Peking Hotel in Peking, the Peace Hotel, Ching Chiang, and Shanghai Mansions in Shanghai and the Tung Fang Hotel in Kwangchow. Most offer rooms with bath or showers. In the past several years hotel room prices have risen and are now roughly comparable to hotels in the West. Hotels normally offer inexpensive laundry services.
All hotels for foreigners offer both western and Chinese food. There are many fine restaurants in Peking including: The Large Peking Duck, the Small Peking Duck, the New Peking Duck, the Capital, the Minorities and a Mongolian restaurant in the Pei Hai Park. (See Appendix 3) In Kwangchow: North Garden (Pei Yuan), South Garden (Nan Yuan), Riverside (Pan Chi), Moslem (Hui Min) and Floating Restaurant. When taking a party to a restaurant, some meals may need to be ordered 12 to 24 hours in advance to allow for proper preparation.
Sightseeing and Entertainment
Inquiries may be made of the host organization, the sponsoring trade corporation or the China Travel Service concerning visits to places of historical interest. Some of the more popular are:
Peking. The Forbidden City, Temple of
There are frequent performances of the Chinese national opera, ballets, and theatre groups as well as sporting demonstrations. In addition, trips to nearby communes and factories can be arranged. Cars with drivers and guides may be hired through China Travel Service.
Generally, the initiative for entertainment should be left to the Chinese officials. Visiting businessmen normally find it difficult to reciprocate. However, when one is entertained at a
banquet, it is acceptable and often desirable to host a "return" banquet before departing for home. Normally the Chinese will provide assistance in arranging for the return banquet.
In China, the family name is always mentioned first. Thus, Wang Fu-ming should be addressed as Mr. Wang.
Normally a visitor will be invited to dinner at a restaurant during his stay, most often by the organization which is sponsoring his visit. Dinner usually begins about 6:30-7 p.m. The guest should arrive on time or a little early. The host normally toasts his guest at an early stage in the meal with the guest reciprocating after a short interval. The usual procedure is to leave shortly after the meal is finished. The guest makes the first move to depart.
Tipping is forbidden. However, it is appropriate to thank the hotel staff and other service people for their efforts on your behalf. Generally, gifts should be of nominal value and presented to the host group; individual gifts are not necessary although little mementos of the occasion may be appreciated.
It is customary to present business cards and helpful if one side is printed in Chinese. Presentation of cards is usually not reciprocated. Cards may easily be printed in Chinese in Hong Kong.
Visitors should conduct themselves with restraint and refrain from loud boisterous actions.
Generally, photographs are allowed although the Chinese may exhibit sensitivity to shots of airports, bridges, ports and the like or anything of military significance. If there is a doubt as to the suitability of the subject, consult your tourist guide or a Chinese official before taking the picture. The Chinese generally allow undeveloped film to be taken out of the PRC, but reserve the right to make exceptions, and occasionally do.
Only certain brands of film can be processed in the PRC: Kodacolor (negative), Agfa Color and Sakura both positive and negative, Fuji Color only negative and Ektachrome only positive.