Home > News Archive > US firms face too many "headaches" in China

US firms face too many "headaches" in China

Reuters

US Commerce Secretary Gary Locke attends a news conference after the 20th US-China Joint Commission on Commerce and Trade in Hangzhou, Zhejiang province, in this 29 October 2009 file photo. Locke said US companies face too many obstacles trying to do business in China and could lose interest if Beijing backslides on openness and the rule of law.File photo/Reuters/Aly Song/China

US companies face too many obstacles trying to do business in China and could lose interest if Beijing backslides on openness and the rule of law, US Commerce Secretary Gary Locke said on Thursday.

“Recent events, specifically the well-publicised Google incident, have reminded us of the continued challenges faced by foreign and US companies operating in China,” Locke said in the prepared text of a speech at the US-China Business Council’s annual forecast conference.

“China needs to continue making strides to be more transparent, predictable and committed to the rule of law. If there is backsliding on these issues, it will affect the appetite of US companies to enter the Chinese market and ultimately that will be bad for everyone,” Locke said.

He also criticised a Chinese government plan to promote domestic innovation by giving Chinese companies that use Chinese intellectual property an advantage in bidding on government procurement projects.

Major US business group wrote to Locke, Secretary of State Hillary Clinton and other administration officials this week to complain about the initiative.

The Chinese plan is a serious concern that puts US companies at a significant disadvantage in bidding on contracts worth an estimated $85 billion annually, Locke said.

“Moreover, we recognise that this issue is just one facet of a broader Chinese approach to industrial policy that is creating headaches for US companies operating in and trying to export to China,” he said.

However, Locke began and ended his speech on more positive notes, saying he believed that no country offered greater growth potential for US exports than China.

Locke, a Chinese-American, said he would be leading a trade mission to China and Indonesia in May to promote exports of US clean energy and energy efficiency products.

The United States has big trade imbalance with China, but “keeping Chinese goods from the US market is not the answer to addressing our trade deficit,” Locke said.

“Instead, making sure the Chinese market is more open to US companies is the most productive solution,” he said.

Copyright © 2010 Reuters

Published in Reuters website