News / USA

US Official: American Companies Face Discrimination in China

William Ide

U.S. Commerce Secretary Gary Locke is on a trip to China to promote clean energy business and forge more cooperation between Beijing and Washington.  Locke says that while the two governments are finding ways to work together, American companies have substantial concerns about obstacles to doing business in China, one of the world's fastest growing and largest markets.

Locke says that the main concerns he has heard from American business leaders are that the Chinese government lacks transparency and that foreign businesses cannot count on fair treatment here.

"Businesses frequently don't know what the rules are, or how they will be enforced or how decisions are even made," said Locke.  "And too many government policies openly or implicitly discriminate against foreign firms."

Locke says this is particularly true in the field of energy, where projects often require investments of hundreds of millions of dollars and take decades to bring a profit.

Locke says a troubling example of the challenges American businesses face came late last year.

"China announced a new indigenous innovation accreditation system, which would give favor in China's government procurement process," he added.  "It would give favor and openly support companies that perform their research and development in China and patent their innovations in China."

Locke says that over time such policies could lead to a flight of foreign investment.

Locke is leading a trade mission here of 24 U.S. companies to promote sales of clean-energy technology.

Early next week, Secretary Locke will be among several cabinet officials attending the annual U.S. China Strategic and Economic Dialogue in Beijing.  He says they will raise concerns about market access and investment barriers.

He says that one area where Beijing could give U.S. companies more access is in the field of clean energy. Washington argues that sales of such technology to China will help balance the two countries' economies by boosting exports from the United States and creating millions of jobs.

Locke says that as the world's two biggest emitters of greenhouse gases, which scientists say contributes to climate change, China and the United States have a responsibility to work together to promote clean energy.

"The development of the new technologies that we need to curb greenhouse gas emissions could also spur one of the greatest economic opportunities of the 21st century," said Locke.  "Worldwide, energy is a six trillion dollar market and the fastest growing sector is the cleaner, greener kind."

Over the past few days, Chinese officials have voiced concerns about U.S. export controls and how they limit Chinese access to advanced technologies. It is one of many topics Beijing is expected to raise during the Security and Economic Dialogue meetings.

Chinese officials argue that the restrictions are partly to blame for China's huge trade surplus with the United States.

Locke says Washington is reviewing the export controls and that the U.S. will complete a plan to overhaul the restrictions this summer.

He says that while protections on sensitive technology with military applications should be intensified, other controls on commonly available high-tech goods, as he puts it, make no sense.

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