China's VAT policy cost purchasers of U.S. chips $344 million in 2003 China’s government has agreed to meet with U.S. officials to discuss a value-added tax (VAT) on imported semiconductors that is at the heart of a complaint the U.S. filed against China with the World Trade Organization (WTO).“The Ministry of Commerce of China notified the U.S. side through China’s WTO delegation that it has accepted the U.S. request for an exchange of views (on the matter),” the ministry said in a brief statement released on Friday.The exact time and place of the meeting has not yet been set, it said. The statement comes in response to a U.S. complaint against China over the VAT on semiconductors that was filed with the WTO on March 18. The U.S. claims China’s VAT for chips violates WTO guidelines.China levies a VAT of 17 percent on sales of all semiconductors in China but Chinese policy gives a rebate of the VAT in excess of 3 percent for certain chips that are manufactured in China, according to the Semiconductor Industry Association (SIA), a U.S. trade group that has lobbied for the U.S. government to intervene with China over the VAT issue.The SIA is pushing for China to either repeal the VAT completely or to reduce the VAT for all chips to 3 percent. U.S. firms exported about $2 billion worth of chips to China in 2003, according to the Office of the U.S. Trade Representative (OTR). China’s tax policy costs the purchasers of those chips an additional $344 million, it said.The total market for semiconductors in China is worth around $19 billion, making it the third-largest market in the world, OTR said. Technology Industry