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Rocky US-Chinese Business Relations

|Mar 31|magazine5 min read

On the heels of the Google-China debacle, the following shouldn't come as too much of a surprise. According to the American Chamber of Commerce in China, the majority of US Businesses, especially those in the tech industry, believe China's indigenous innovation policy will have a negative impact on their efforts.

The policy will limit products in the technology sector purchased by the Chinese government. Already 37 percent of high-tech and IT companies have lost business as a result of these broad based policy changes. These companies feel the Chinese governmnet shows discrimination in SOE (State Owned Enterprise) purchases.

"Chinese officials have made it clear in past statements that SOE purchases should be based solely on market forces," AmCham-China President Michael Barbalas said in a statement. "However, more than half of US companies reporting they are currently losing sales, or that believe they will lose sales, are concerned about the SOE sector. In line with China's WTO accession agreement commitments, we ask the Chinese government to confirm that SOEs are fully excluded from all preferential purchasing policies."

AmCham-China says many of its member companies have already spent billions of dollars investing in world-class research and development centers. Additionally, US companies have provided China's engineers and businesses with global best practices and many of the processes and tools that they need to innovate. Yet despite this reality, many believe that some Chinese policies are increasingly restrictive and protectionist in nature. These obstacles could limit foreign participation in China's economy.

For more on this development, check out US Companies: Concerned About Innovation Policy