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US Companies Feel Increasingly Unwelcome in China

  • Stephanie Ho

A growing number of American businesspeople feel unwelcome in China because of what they see as discriminatory government policies and inconsistent legal treatment. The findings come in a survey released Monday by the American Chamber of Commerce in China.

Amcham-China president Michael Barbalas says a survey of 203 members of his organization shows growing pessimism among American businesses operating in China.

"A question that we had asked before is, 'Are companies increasingly unwelcome to participate and compete in the Chinese market?' which we had in this survey, we had 38 percent saying yes. In 2008, when we asked a similar question, only 23 percent [had that response], so we're up 15 percent in just a little over a year and we thought that was pretty significant," he noted.

He attributes the business community's change in attitude to Chinese government regulations requiring something known as "indigenous innovation." The policy discourages companies - both Chinese and foreign - from using or purchasing foreign technology and instead encourages them to use domestically developed technology.

The Chinese government introduced the policy in 2006, and in December, announced a detailed process for applying for indigenous innovation status.

Critics in the foreign business community charge this could in effect force them to give up important trade secrets, for free, so that they can continue doing business in China.

Barbalas says Amcham is not against China developing its own technology, but is concerned in how the Chinese government will implement the new policies.

"What we're concerned about is that this is done in a way that is really open," he added. "We want to see open markets for trade and investment."

The government has been reaching out to the foreign business community in China. Commerce Minister Chen Deming met recently with foreign businesspeople, and in a news conference this month, Premier Wen Jiabao said he also would like to meet with foreign businesspeople.

Wen says such exchanges would allow them to better understand China's policies. But he says he also would be interested in hearing their opinions as to how China can attract more foreign investment.

Amcham's Barbalas is optimistic about these meetings, saying he hopes they result in clarifying and improving the laws and regulations.

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