A growing number of American businesses feel unwelcome in China because of what they see as discriminatory government policies and inconsistent legal treatment, a survey released Monday said. The American Chamber of Commerce 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 2009.
Inconsistent regulatory interpretation and judicial treatment topped the list of concerns for American 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 will be favoured, according to the policy, 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. The survey was released as the trial opened in Shanghai of four employees of Anglo-Australian miner Rio Tinto - including an Australian citizen - on bribery and trade-secrets charges.
The four defendants were arrested last July during contentious iron ore contract negotiations that later collapsed, and after Rio snubbed a near 20-billion-dollar cash injection from state-run Chinese mining firm Chinalco. The trial has cast a pall over Beijing's relations with Canberra and raised concerns about doing business in China.
Of the American 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. Companies also cited the increasing deviation from international standards in China and the environment for intellectual property as major concerns. The survey also comes as US Internet giant Google has threatened to leave China, citing cyberattacks and censorship, and with Sino-US ties inflamed over a range of contentious issues including China's currency policy. Critics say China keeps the value of its yuan artificially low, making its exports cheaper and thus more competitive on world markets.
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