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US Businesses Optimistic About China's Growing Economy - 2002-04-26

American business people in China said they are hampered by bureaucracy, piracy, and politics. But they are optimistic about the future of business in the world's most populous nation.

The businesses surveyed by the American Chamber of Commerce have said local protectionism and a complex bureaucracy cause problems for companies in China. The business group, called Amcham, said foreign companies encounter a maze of redundant, inconsistent, and sometimes conflicting rules.

But Amcham Chairman Christian Murck said now that China is a member of the World Trade Organization, Chinese officials are more likely to listen to foreign businesses when they draft new laws. He said that is slowly improving the business climate. "It requires a change in behavior and a change in attitude on the part of a lot of government officials who are being asked to give up some power," Mr. Murck said.

The foreign competition that comes with membership in the WTO is expected to throw millions of Chinese out of work, threatening the stability crucial to a good business climate. But Amcham officials have said labor unrest will likely be limited to economically backward areas of China and probably will not hurt U.S. businesses.

Mr. Murck has said American businesses are sympathetic to the plight of jobless Chinese, but he said many defunct state companies would have gone broke regardless of the WTO. He said Beijing is creating a safety net for vulnerable people, and will need the contributions foreign companies make to pay for it.

"But really the only way the society can deal with it is if they are able to generate, as a nation, substantial economic growth and if the government can take some of that surplus in the form of tax revenues and use it to help people through this adjustment," he said.

U.S. businesses and government officials have been asking for protection for intellectual property, including computer programs, movies, and music. Such material is routinely copied illegally and sold in China.

Mr. Murck said Beijing has improved its anti-piracy laws, but has not worked out effective ways to enforce them. He said it is time to put people in jail for copyright violations.

Despite the frustrations, business executives have said two-decades of opening up to the world have improved China's economy. They said WTO membership will add to those gains during the next five years.

Mr. Murck said most of the major foreign businesses have relatively small operations in China. He said the changes brought by the WTO are prompting some to increase their investments and that could help absorb China's growing army of unemployed.