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Tue, Mar 23, 2010 - Page 10 News List

Growing number of US firms don’t feel welcome in China


A growing number of US businesses feel unwelcome in China because of what they see as discriminatory government policies and inconsistent legal treatment, a survey released yesterday said.

The American Chamber of Commerce (Amcham) in China asked 203 member companies if they felt unwelcome to participate and compete in China’s market, with 38 percent saying they did, up from 26 percent in the fourth quarter of last year.

Inconsistent regulatory interpretation and judicial treatment topped the list of concerns for US businesses, the survey said, without giving any specifics on the legal concerns. Respondents also cited what they view as a push by Beijing to squeeze foreign technology companies out of the multi-billion dollar market for selling computers and office equipment to government departments.

New rules stipulate sellers of high-tech goods must contain Chinese intellectual property as part of an “indigenous innovation” campaign, in order for them to be included in a government procurement catalogue. Accredited products are to be favored, the policy states, which foreign firms say effectively excludes them from the process.

“The AmCham-China survey shows that US companies believe they face product discrimination in state-owned enterprise purchases, as well as in government procurement,” a statement accompanying the survey results said.

Of the US technology companies surveyed, 57 percent said they expected the preferential purchasing policy to have a negative impact on their operations in China, while 37 percent said they were already losing sales.

Member-companies believed some policies in China were “increasingly restrictive and protectionist,” which could limit foreign participation in the world’s third-largest economy, the survey said.

It did not say what percentage of companies felt that way.

The survey was released as the trial opened in Shanghai of four employees of miner Rio Tinto, including an Australian citizen, on bribery and trade secrets charges. It also comes as US Internet giant Google has threatened to leave China, citing cyber attacks and censorship.

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