Foreigners' market access complaints about China Go back »

2009-02-26 | All chapters

Foreigners' market access complaints about China
Jason Subler, Reuters, 25th February 2009

Western business groups have long said China fails in a number of ways to provide equal access and a level playing field for foreign investors.

Following are some highlights of their complaints.

INTELLECTUAL PROPERTY RIGHTS:

Inadequate protection of intellectual property rights (IPR) remains a top concern for foreign firms, despite progress in recent years in fighting copyright, trademark and patent violations.

Business groups say that China does not treat foreign-invested firms equally when it comes to bidding for public procurement projects.

GOVERNMENT PROCUREMENT:

For example, the European Chamber of Commerce in China has called for greater consistency in the application of qualification criteria, including whether foreign-invested but locally registered firms are eligible.

U.S. business groups say the government's drive to promote 'indigenous innovation' underpins policies in standard-setting, procurement and other areas that threaten to exclude U.S. businesses from the Chinese market.

LIMITS ON INVESTMENT:

China maintains restrictions on foreign investment in a range of sectors including petrochemicals, often limiting them to joint ventures and capping their equity stakes at below majority ownership.

The EU Chamber has called for Beijing to allow majority ownership by foreign auto firms and to eliminate the restriction that they may have at most four joint ventures in the country -- two for passenger cars and two for commercial vehicles.

U.S. firms are also pushing for greater access, in particular in services industries including express delivery and insurance.

TRANSPARENCY:

While acknowledging progress, business groups say foreign firms are still adversely affected by problems such as lack of transparency in rule-making; inadequate coordination among different levels of government; and short advance notice in calls for comments on new regulations.

For example, duplicative regulation of imports of medical devices serves as a barrier for foreign firms, the EU Chamber has said. U.S. business groups have said improving transparency in the development, enactment and implementation of rules, standards and regulations is a 'key concern'.

APPLICATION OF STANDARDS:

Western business groups are also concerned about China's process of developing technical standards and assessing conformity with them.

U.S. business groups say standards, particularly in the technology sector, are increasingly being used as a tool to help China achieve its industrial policy goals.

Sources: EU Chamber's 2008/2009 European Business in China Position Paper; 2008 White Paper on American Business in China, published by AmCham-China, AmCham Shanghai and AmCham South China.

Source of this news report: http://www.forbes.com/feeds/afx/2009/02/25/afx6092903.html