US-China trade war escalates, tariff list aims to hinder China’s high-tech development: expert

https://youtu.be/vK4ADxuvIgk https://youtu.be/HdADW3ZpFNs

China will impose 25 percent in tariffs on 659 US goods worth $50 billion, including soybeans, cars and seafood.

The move came as a tit-for-tat response to the tariffs announced by the Trump administration Friday morning. An expert said the US decision does not aim to tackle the trade deficit with China but to block the Chinese government's efforts in high-tech development.

Tariffs on 545 US goods worth $34 billion will take effect on July 6, involving agricultural products, car parts and seafood, according to a statement released by China's Ministry of Commerce (MOFCOM) on Saturday morning. Soybeans, which are China's biggest import from the US in value, are on the list.

Chemicals, medical equipment and energy products from the US will also be subject to 25 percent tariffs, which will be announced at a later date.

The revised list is longer and involves more categories of products than a preliminary list of 106 US goods published by the ministry in April, but the total value of the products remains at $50 billion.

A Chinese commerce expert found that aircraft were removed from China's new list, which is noteworthy.

"We need aircraft [from the US]. We have to consider the costs of the countermeasures we plan to take," Bai Ming, deputy director of the Ministry of Commerce's International Market Research Institute, said on Saturday soon after the Chinese tariffs were announced.

It's like acting as a soccer referee who will not call out the offenses and let the play continue when the game still benefits the attacking team even though an attacking player is fouled, Bai further explained.

China is one of the fastest-growing civil aviation markets in the world, and 15 to 20 percent of Boeing's aircraft deliveries are projected to end in the Chinese market over the next two decades, according to Morgan Stanley.

The US has kept changing their mind and ignited a trade war, which China does not want and will firmly oppose, a spokesperson of the MOFCOM said immediately after US took trade measures on China. "This move not only hurts bilateral interests, but also undermines the world trade order."

"China and the US still have hopes of negotiating and reaching an agreement, as both the tariffs announced by the two countries will not take into effect until next month," said Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges.

Wang told the Global Times that the removal of aircraft from the new list can be a signal that China still wants to talk, and also aircraft can be a valuable chip in the next round of trade negotiations.

Meanwhile, Wang said the Trump administration's newly published list is not so much a solution for the trade deficit problem with China as efforts to hinder China's technology development.

US President Donald Trump on Friday announced 25 percent tariffs on $50 billion in Chinese goods, containing industrially significant technologies related to China's "Made In China 2025" strategy.

According to a list published by the office of the US Trade Representative, the tariffs will be applied on more than 1,000 types of Chinese goods, including aircraft engine parts, bulldozers, nuclear reactors and industrial and agricultural machinery.

American industry also opposed Trump's decision.

"Imposing tariffs places the cost of China's unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers, and ranchers. This is not the right approach," US Chamber of Commerce President and CEO Thomas J. Donohue said in a statement posted on the chamber's website on Friday.

By Zhang Ye Source:Global Times


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Looking East policy with a twist to China ?

Japan may have led Malaysia's Look East policy of yore, but the stakes are heavily tipped in China's favour now as the leader of the new world order.

PRIME Minister Tun Dr Mahathir Mohamad (pic) has announced that Malaysia is renewing, or to be more precise, upgrading the Look East policy he adopted as a foreign policy 30 years ago.

It was unveiled after he came to power in 1981 and now, as the premier for the second time, he has picked up the pieces of his past and repackaged it.

His inclination to Japan then was understandable since the country was the rising star of Asia.

Although Look East included South Korea and Taiwan, it basically meant Japan.

There were sound reasons to why Dr Mahathir wanted Malaysia to emulate some of the East Asian characteristics, both economically and ethically.

I think any Malaysian who has visited Japan can vouch for the people’s work ethic, honesty, orderliness, politeness, punctuality, cleanliness, precision, dedication to excellence, innovation and good manners.

Malaysians in Japan feel safe – they rarely get cheated despite being tourists, which is more than can be said for many countries.

Personally, Japan remains my No. 1 holiday destination. Like Dr Mahathir, I have the highest admiration for the Japanese. They are certainly exemplary, and that is indisputable.

Dr Mahathir has continued to have high regard for the Japanese and history seems to be repeating itself.

His Look East Policy shocked and confused the Malaysian foreign ministry, with many officials viewing it as undefined and vague.

The Ministry being left in the dark about the Prime Minister’s move led to it being unaware of how to implement the policy.

Fast forward to 2018. It’s likely that his new batch of ministers were also caught off guard with the revival of the Look East policy, more so when the Foreign Minister has yet to be installed.

Without doubt, Japan is an important partner to Malaysia because we have more than six decades’ ties with the country.

In 2016, Japan ranked Malaysia as its fourth-largest trading partner with bilateral trade standing at RM120bil.The strong trade and investment relations between the nations are also underpinned by the Malaysia-Japan Economic Partnership Agreement.

The latest Malaysia-Japan collaboration includes the Bukit Bintang City Centre project, which has managed to attract the leading real estate group in the Land of the Rising Sun, Mitsui Fudisan Co Ltd, to invest in what will be the mega project’s RM1.6bil retail mall.

But Dr Mahathir’s choice of his first foreign visit to Japan as PM has raised many eyebrows. Perhaps it was just the coincidental timing of the annual Nikkei Conference, which he attends without fail.

I was told that his office had informed the Chinese Embassy here, as a matter of courtesy, to avoid reading into the matter, given the long, bitter rivalry between the two nations.

Dr Mahathir was also visiting Japan after a series of announcements, calling for the review, if not cancellation or postponement, of several mega Chinese-driven projects in Malaysia.

The method of repayments with China, involving huge amounts of money, has, of course, been called into question and condemned. One critic even described the terms as “strange.”

It’s apparent the situation is delicate now, and we need to tread carefully because we are dealing with a global leader.

Powerful alliance

The PM admitted that his government was “dealing with a very powerful country. As such, matters affecting both parties will require friendly discussions”.

Former finance minister Tun Daim Zainuddin also said that Malaysia will carefully handle business contracts with China made by the previous administration.

In an interview with The Star, Daim admitted that the economic superpower is a friend to Malaysia.

“China is very important to us,” the Council of Eminent Persons spokesman said.

“We enjoy very close relations, but unfortunately, under the previous administration, a lot of China contracts are tainted, difficult to understand and the terms are one-sided,” said Daim.

There is plenty at stake here. The world has also changed, and Malaysia needs to be mindful of its diplomatic move. These are sensitive times, and to the Chinese, the issue of “face” is an important one.

Whether we like it or not, the whole world is looking towards China because this is where the fundamental building blocks of a future global digital economic model is being curated and built.

Japan’s economy, on the other hand, has been in regression over the last two decades, and open data is easily available to prove this point. Just google it.

That aside, China is Malaysia’s largest trading partner in Asean, especially after Malaysia-China bilateral transactions rose as much as 28% to RM139.2bil in 2017’s first half.

The Chinese government has been very positive with bilateral relations with Malaysia over the years, and this great foundation is what we must build on. It doesn’t matter who the Malaysian Prime Minister is now.

With Ali Baba and Tencent coming to Malaysia, SMEs – which comprise more than 95% of Malaysian business entities – exporting to China will be a huge foreign trade opportunity.

Of all the Asean nations, Malaysia has the largest pool of businessmen who speak the relevant Chinese dialects and understand the culture. But it’s not just the Malaysian Chinese businessmen who stand to benefit, but other races too.

Let’s not forget that China will be under steady stewardship for the coming decade since Xi Jinping has strengthened his position as the premier. And with Dr Mahathir rightfully announcing that Malaysia will be a neutral country, this will mean a stable foreign policy which is crucial for the rules of engagement.

The same can’t be said of Japan, though, as it has a history of turbulent domestic politics, with frequent changes in leadership.

Truth be told, China has outperformed Japan. The republic has become a model of socio-economic reform that connects, not only the past with the present, but more importantly, can rewrite the history of human development into our common future.

The One Belt, One Road initiative is the future. It was also reported that China has overtaken Japan in global patent applications filed in 2017 and is closing in on the United States, the long-standing leader, the World Intellectual Property Organization said in a report.

With 48,882 filings, up 13.4% from a year earlier, Chinese entities came closer to their American counterparts, which filed 56,624 applications. Japanese applicants ranked third with 48,208 demands for patents, up 6.6% from a year ago, the report, released Wednesday, revealed. According to the Geneva-based institution, China will likely overtake the US as the world’s largest patent applicant within three years.

“This rapid rise in Chinese use of the international patent system shows that innovators there are increasingly looking outward, seeking to spread their original ideas into new markets as the Chinese economy continues its rapid transformation,” WIPO director-general Francis Gurry said.

The overall filings in 2017 were 243,500, up 4.5% from a year earlier.

Data indicates that China and Japan were key drivers of the surge in applications.

“This is part of a larger shift in the geography of innovation, with half of all international patent applications now originating in East Asia,” Gurry reportedly said.

Two Chinese firms topped the list, led by Huawei Technologies Co with 4,024 patent applications and ZTE Corp with 2,965 submissions. Intel Corp of the United States is placed third with 2,637 filings, followed by Mitsubishi Electric Corp with 2,521.

China has also declared its ambition to equal the US in its AI capability by 2020 and to be number one in the world by 2030.

If there is a single country to take a cue from, then it can only be China. Look at its growth since 1957, 1967, 1987, 1997 and 2017, and see the strides it has made in the shortest time. Remember, China was once poor and backwards. Many Malaysian Chinese used to send money back to their families in China, especially in 1950s and 1960s, and even 1970s. But look where the country is now.

Malaysia is in pole position to take advantage since our neighbour Singapore has always been perceived to be too US-centric. It will be a waste if we let politics get in the way, as no one can dispute that China now plays a respected and vital role.

Anyone can tell that China will reshape the new world order. It is the new Middle Kingdom and is the country to look to.

And Dr Mahathir should pick up on this because at the end of his trip to Japan, the press bombarded him with the predictable and nagging question – when will he be visiting China?

By Wong Chun Wai On The Beat

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now the group's managing director/chief executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.


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Smartwatch trademarks for Samsung "Galaxy Gear"?

Samsung Electronics has applied for US and South Korean trademarks for a watch that connects to the Internet in the latest sign that consumer technology companies see wearable devices as the future of their business.

Samsung described "Samsung Galaxy Gear" as a wearable digital electronic device in the form of a wristwatch, wrist band or bangle in its July 29 application with US Patent and Trademark Office. A month earlier, it applied for a "Samsung Gear" trademark in South Korea.

The trademark applications did not show the shape of the products. But drawings from a Samsung design patent approved in May show a watch-like design with a flexible screen that curves around the wrist.



The US trademark application said the device will be "capable of providing access to the Internet, for sending and receiving phone calls, electronic mails and messages" as well as "for keeping track of or managing personal information."

The trademark filings in the US and in South Korea show that Samsung is deep in preparations for what tech industry experts expect will be a new generation of mobile technology that dramatically expands the utility of single-function objects such as watches and glasses. The South Korean consumer electronics giant was caught flatfooted by Apple's invention of the smartphone but through what turned out to be a legally risky strategy of imitation was able to capture a dominant share of the global smartphone market within a few years.

Apple applied June 3 for a trademark in Japan for "iWatch." Industry watchers have long speculated that Apple is working on a smart watch that uses a version of the operating system that powers the iPhone and iPad. The company has not confirmed those rumors but CEO Tim Cook has hinted it may be developing a wearable computing device.

Google is testing an early version of Internet-connected spectacles called Glass. It uses a small screen above the right eye that displays information and imagery retrieved from the Internet.

The South Korean patent office said the Gear trademark will not be approved this year as it takes seven to eight months to start reviewing applications due to a waiting list. Samsung applied for the South Korean trademark on June 21.

It was not clear if Samsung would use the "Samsung Gear" trademark for a Smart Watch. The trademark application covers 38 possible products including mobile telephones, bracelets, glasses and software interfaces that monitor human vital signs.

South Korea's patent office said in June that Samsung had patented watch designs in which more than three quarters of the device is covered by a flexible display that curves around the wrist. Illustrations showed 'back' and 'home' buttons at the bottom of the screen. Another illustration shows a rectangular screen with an edge that tapers toward the top.

The product is made of metal, synthetic and glass materials, Samsung's patent document said.

Samsung executive vice president Lee Young Hee said in March interview with Bloomberg that the company's mobile division has been working on a smart watch. Samsung declined to confirm the report then.

Company spokeswoman Chenny Kim declined to comment on the patent applications. - AP

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TPP affecting health policies?

The present debate on the TPPA in Malaysia is part of the global discussion on how trade and investment treaties are affecting health, including access to medicines and tobacco control.

ARE big companies making use of trade and investment agreements to challenge health policies? Evidence is building up that they do so, with medicine prices going up and tobacco control measures being suppressed.

This issue came up in Parliament last week when International Trade and Industry Minister Datuk Seri Mustapha Mohamed said the Government would not allow the Trans-Pacific Partnership Agreement (TPPA) to cause the prices of generic medicines to go up.

He added he would defend existing policies on patents and medicines and if we don’t agree with some of the terms, we can choose not to sign it.

Trade agreements and health concerns are linked because some companies selling tobacco, medicines and food are using these agreements to sue governments that introduce new regulations to safeguard public health.

Malaysia will host the next round of the TPPA negotiations this month, so the debate on these issues can be expected to continue.

The World Health Organisation’s Director-General Dr Margaret Chan recently noted that corporate interests are preventing health measures.

The cost of non-communicable diseases are shooting up. The costs for advanced cancer care are unsustainable, even in rich nations and some countries spend 15% of the health budget on diabetes.

“In the developing world, the cost of these diseases can easily cancel out the benefits of economic gain,” she said. It is harder to get people to adopt healthy lifestyles because of opposition by “unfriendly forces”.

“Efforts to prevent non-communicable diseases go against business interests. These are powerful economic operators. It is not just Big Tobacco anymore. Public health must also contend with Big Food, Big Soda and Big Alcohol. All of these industries fear regulation and protect themselves by using the same tactics,” said Dr Chan.

Those tactics include “front groups, lobbies, promises of self-regulation, lawsuits and industry funded research that confuses the evidence and keeps the public in doubt”.

Many studies show how trade agreements with the United States or Europe have raised the prices of medicines because of the constraints placed by the FTA’s strict patent rules on the sale of cheaper generic medicines. Patients have had to switch to costlier branded medicines.

One study estimated that Colombia would need to spend an extra US$1.5bil (RM4.74bil) a year on medicines by 2030 or people would have to reduce medicine consumption by 44% by that year.

“Data exclusivity”, one of the features of the FTA, has delayed the introduction of cheaper generic versions of 79% of medicines launched by 21 multinational companies between 2002 and mid-2006 and, ultimately, the higher medicine prices are threatening the financial sustainability of government health programmes.

The tobacco industry is also making use of trade and investment agreements to challenge governments’ tobacco control measures.

According to an article by Prof Mathew Porterfield of Georgetown University Law Centre, the company Philip Morris has asked the US government to use the TPPA to limit restrictions on tobacco marketing.

In comments submitted to the US trade representative (USTR) , Philip Morris argued that Australia’s plain packaging regulations would be “tantamount to expropriation” of its intellectual property rights, and complained of the broad authority delegated to Singapore’s Health Minister to restrict tobacco marketing.

In order to address these “excessive legislative proposals”, Philip Morris urged USTR to pursue both strong protections for intellectual property and inclusion of the investor-state dispute settlement mechanism in the TPPA.

The company has instituted legal cases against Uruguay and Australia for requiring that cigarette boxes have “plain packaging”, with the companies’ names and logos disallowed.

These cases are under bilateral investment agreements. The company claims that the packaging regulations violate its right to use its trademark, and also violate the agreement’s principle of “fair and equitable treatment”.

It claims that a change in government regulation that affects its profits and property is an “expropriation” for which it should be compensated.

Under such agreements, companies have sued governments for millions or even billions of dollars.

The provisions in the bilateral investment treaties are also present in trade agreements including the TPPA. Companies can directly sue the governments in an international court, under an investor-state dispute system.

Having been sued by the tobacco company for its health measure, the Australian government has decided not to enter any more agreements that have an investor-state dispute system.

In the TPPA negotiations, Australia has asked that it be granted an exemption from that agreement’s investor-state dispute system. So far, such an exemption has not been agreed to.

The controversies over how trade and investment agreements are threatening health policies will not go away, because the rules are still in place and new treaties like the TPPA are coming into being.

A “Google search” on this issue will yield hundreds, in fact, many thousands of documents. And the number will go up as long as the controversy continues.

Global Trends
By MARTIN KHOR

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A victory for patients & generic drugmakers vs Novartis in landmark patent case

The Indian Supreme Court’s ruling that only genuinely new inventions should be granted patents means that medicines can still be affordable.

The front office of Novartis in Mumbai, India, Monday, after India's Supreme Court rejected drug maker's attempt to patent a new version of a cancer drug Glivec. 

PATIENTS around the world who look to India for low-cost medicines to treat their ailments heaved a sigh of relief last week when the Indian Supreme Court turned down a claim for a patent for a cancer drug.

This means that drug companies in India can continue to produce generic versions of the same drug, Glivec or Gleevec, at a much lower price, thus making it affordable to thousands more cancer patients.

Glivec, produced by the Swiss-based company Norvartis, can cost a patient up to US$70,000 (RM217,000) for a year of treatment, whereas the generic versions of the same medicine made by Indian companies cost around US$2,500 (RM7,750). The drug is used to treat some forms of leukaemia as well as a rare type of stomach cancer.

The Supreme Court decision also seems to open the road for patents not to be granted for more medicines, since it confirmed that only drugs that are genuinely a new invention can be granted patents.

When a patent is granted to a company for a drug, other companies are not permitted to produce generic versions of the medicine for a period of 20 years or so.

The monopoly given to the patent holder enables it to charge high prices since there is a lack of competition.

Many or even most patients are unable to buy the medicines, giving rise to frustration and despair especially when their lives are at stake.

Some companies whose patents are about to expire apply for a new patent for the same drug after changing the composition slightly or changing the form of the drug.

The “new” drug is often not a new invention, but only a minor modification that is made with the aim of having the patent renewed for another period. This practice is popularly termed “evergreening” of the patent.

An extension of the patent term means that the company continues to enjoy the monopoly and high prices, which continue to be out of reach to many patients.

Although governments are obliged to have laws allowing for patents to be given for inventions under the World Trade Organisation’s TRIPS agreement, each country is allowed to set its own definition and standards for what is an invention.

The Supreme Court decision confirms that the Indian patent authorities exercised their powers lawfully and properly when they rejected the patent application for Gleevec on the ground that the medicine was not a new invention.

Novartis had challenged the interpretation given by the Indian Patent Office to Section 3 (d) of the Indian Patents Act that seeks to prevent the grant of patents for non-inventive new forms of known medicines.

The Novartis application had claimed a patent for a new salt form (imatinib mesylate), a medicine for the treatment of chronic myeloid leukaemia, sold under the brand name Gleevec (or Glivec in other countries).

The Indian patent office had rejected the patent application on the ground that the claimed new form was anticipated in an earlier US patent of 1996 for the compound imatinib and that the new form did not enhance the therapeutic efficacy of the drug. The decision was upheld by the Indian Patents Appellate Board.

The legal challenge from Novartis had caused anxiety among patients groups, governments of developing countries and some international organisations in view of the possible negative implications for access to affordable medicines if the Norvatis petition succeeded.

Most developing countries rely on Indian generic drug companies for the supply of low-priced medicines for many diseases.
A weakening of the interpretation or use of Section 3 (d) would have enabled multinational drug companies to extend their patent monopolies based on “evergreening” or “trivial” incremental improvements which could delay the supply of generic medicines for the treatment of HIV/AIDS, cancer and other diseases.

The decision by the Indian Supreme Court is thus of major significance not only for India but for patients and health authorities in the developing countries.

In interpreting Section 3 (d), the Supreme Court observed that this section was introduced in the 2005 amendment to the Patents Act to ensure that while India allowed product patents on medicines in accordance with its WTO obligations, it did not compromise public health through “evergreening” of pharmaceutical patents.

The court hence took into account the concerns about the impact of the TRIPS agreement on public health and on the development of an indigenous pharmaceutical industry.

Moreover, it considered the implications of the Novartis case for the availability of essential medicines at affordable prices globally.

The court decision reproduced two letters from Dr Jim Yong Kim, the former director of the Department of HIV/AIDS at the World Health Organisation (current president of the World Bank) and from UNAIDS to the Indian health minister expressing their concerns relating to the continuous availability of affordable Indian generic drugs in other developing countries.

Thus, the Supreme Court decision has implications beyond India. It upholds the high standards by which drug patent applications can be processed. While genuinely new inventions are granted patents, drugs that are not really new need not.

The implication is that Indian generic companies can be expected to produce many more medicines in future, and continue their reputation as the “pharmacy of the developing countries”.

It is also heartening that the court decision reaffirms the priority for concerns for the patients’ right to receive treatment at more affordable prices.

The court decision is also likely to spark interest among other developing countries about the Indian patent law and the policies guiding it. Developing countries can learn from the Indian approach of balancing patents and public health.

Global Trends
By MARTIN KHOR
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