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UPS chief says China blocks fair competition

United Parcel Service Inc chief executive Michael Eskew said China is using unfair barriers to block foreign competition and has failed to do enough to combat product piracy since joining the WTO.

"China is creating many new discriminative rules, after scrapping regulations that are directly against the WTO treaties," Eskew, also chairman of the Washington-based US-China Business Council, said in a speech to a trade fair in Xiamen.

"Foreign companies are seriously disadvantaged when competing with state companies," he said.

The US is pressing China for wider access to its domestic market and tougher action against illegal copying of US movies, software and films to help close a record US$124 billion trade gap.

China seized 2 million fake compact discs in the first half in its biggest piracy crackdown yet, the government said on Monday.

"On piracy issues, our attitude is clear and our action is resolute," Chinese Vice Premier Wu Yi (吳儀) said in another speech at the trade fair. "This year, we will make it easier for violators to be punished under China's criminal law."

China has asked foreign companies to adopt the nation's own technological and scientific standards in information technology, agriculture and other industries, Eskew said.

The government has also imposed high capital requirements or strict license application procedures to shut out competition, he said.

United Parcel, FedEx Corp and other companies have protested plans by China to bring in a revised postal law that the companies say is designed to protect the country's postal monopoly.

State-owned China Post has its own affiliated express delivery service, EMS.

"As far as we know, the draft law is not made to create a level playing ground, and does not encourage free competition," Eskew said. "China cannot attract foreign investment properly without a fully competitive logistics industry."

On piracy, the central government's attempts to crack down have been ineffective because local government enforcement has been too weak, according to Eskew.

"We will continue to work with the Chinese government and companies to make sure this problem will be solved effectively," he said.
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