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Samsung urges China to stop 'discriminatory treatment'

By Kim Yoo-chul

Samsung Electronics is urging the Chinese government to stop its "discriminatory treatment" against its semiconductor and other businesses in China, company officials said Monday.

"Samsung Electronics requested the cancellation of some policies, which we believe are discriminatory and unfair, in exchange for assistance in supporting China-initiated economic and business projects," one official said.

Under the "Made in China 2020" plan, a national-level initiative, Beijing is pushing foreign companies to transfer value-added technology and grant wider access to intellectual property (IP) to its Chinese partners.

Foreign players including Samsung Electronics have long been worried about the initiative as this could lead to discriminatory practices against them.

The plan, which has become a political focus of both President Xi Jinping and Prime Minister Li Keqiang, seeks to upgrade traditional industries through the application of technologies in semiconductors and batteries.

The official said Samsung hopes to hear updates from China's Ministry of Industry and Information Technology on its appeal. The ministry stopped providing subsidies for Chinese electric vehicles (EVs) that ran on batteries from Samsung's battery affiliate Samsung SDI.

"Since 2016, the year when China applied the ban on Korean batteries, Samsung SDI has been struggling. The primary reason to operate battery factories in China is to supply EV batteries there, the largest EV market, without disrupting production. Samsung sent messages to top Chinese government officials asking them to address the issue, quickly," the official said.

China recently posted online a list of vehicle models that are eligible for subsidies. It excluded vehicles like the Dongfeng Kia and the Dongfeng Renault that use Korean batteries. Subsidies are important for Chinese EV manufacturers as they cover up to half the price of the cars, according to officials.

Following the ban, Samsung SDI has been selling the batteries produced in its Chinese factories to EV makers outside China to prevent further operating losses.

It's debatable whether this is a retaliatory measure, as some say the policy is a move toward industrial protectionism in the world's No. 2 economy.

Samsung also asked China to ensure a fair investigation of a price-fixing scheme that it was allegedly involved in.

China's antitrust regulators are investigating the world's top three memory chipmakers amidst price-fixing allegations.

While Baijing insisted the three's profits were due mostly to their dominance in the market, some officials and analysts claim China is trying to use the investigation as a "bridge" to negotiate a technology transfer and renew IP licensing to Chinese companies.

"There is no price fixing. Rising chip prices were driven by solid demand. Therefore, Samsung Electronics just wants to make sure it is treated fairly during the investigation," another official said.


By Kim Yoo-chul

Samsung Electronics is urging the Chinese government to stop its "discriminatory treatment" against its semiconductor and other businesses in China, company officials said Monday.

"Samsung Electronics requested the cancellation of some policies, which we believe are discriminatory and unfair, in exchange for assistance in supporting China-initiated economic and business projects," one official said.

Under the "Made in China 2020" plan, a national-level initiative, Beijing is pushing foreign companies to transfer value-added technology and grant wider access to intellectual property (IP) to its Chinese partners.

Foreign players including Samsung Electronics have long been worried about the initiative as this could lead to discriminatory practices against them.

The plan, which has become a political focus of both President Xi Jinping and Prime Minister Li Keqiang, seeks to upgrade traditional industries through the application of technologies in semiconductors and batteries.

The official said Samsung hopes to hear updates from China's Ministry of Industry and Information Technology on its appeal. The ministry stopped providing subsidies for Chinese electric vehicles (EVs) that ran on batteries from Samsung's battery affiliate Samsung SDI.

"Since 2016, the year when China applied the ban on Korean batteries, Samsung SDI has been struggling. The primary reason to operate battery factories in China is to supply EV batteries there, the largest EV market, without disrupting production. Samsung sent messages to top Chinese government officials asking them to address the issue, quickly," the official said.

China recently posted online a list of vehicle models that are eligible for subsidies. It excluded vehicles like the Dongfeng Kia and the Dongfeng Renault that use Korean batteries. Subsidies are important for Chinese EV manufacturers as they cover up to half the price of the cars, according to officials.

Following the ban, Samsung SDI has been selling the batteries produced in its Chinese factories to EV makers outside China to prevent further operating losses.

It's debatable whether this is a retaliatory measure, as some say the policy is a move toward industrial protectionism in the world's No. 2 economy.

Samsung also asked China to ensure a fair investigation of a price-fixing scheme that it was allegedly involved in.

China's antitrust regulators are investigating the world's top three memory chipmakers amidst price-fixing allegations.

While Baijing insisted the three's profits were due mostly to their dominance in the market, some officials and analysts claim China is trying to use the investigation as a "bridge" to negotiate a technology transfer and renew IP licensing to Chinese companies.

"There is no price fixing. Rising chip prices were driven by solid demand. Therefore, Samsung Electronics just wants to make sure it is treated fairly during the investigation," another official said.


Kim Yoo-chul yckim@koreatimes.co.kr


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