March 22 (Bloomberg) — China’s new rules to encourage home-grown technology are eroding sales at U.S. companies and raising concern these losses may multiply, according to an American Chamber of Commerce survey released today in Beijing.

Twenty-eight percent of 203 members responding to the survey said they are losing business because of the policy. Among technology companies, 37 percent said they are already being hurt and 57 percent predicted they would be disadvantaged in the future.

Foreign companies with operations in China are concerned the rules are discriminatory and may extend beyond the 599 billion yuan ($87.8 billion) government-procurement market to orders from state-owned enterprises, which last year had combined revenue of 22.5 trillion yuan. The chamber represents companies including Microsoft Corp., JPMorgan Chase & Co. and United Technologies Corp.

“Many foreign companies are starting to believe that the future China business opportunity is shrinking,” said James McGregor, a senior counselor in Beijing at APCO Worldwide, a public affairs company. “This indigenous innovation policy seems clearly aimed at forcing foreign technology here so that Chinese companies can tweak it and call it their own.”

The report comes as Mountain View, California-based Google Inc., the owner of the world’s most popular Internet search engine, considers withdrawing from China because of censorship restrictions……. (more details from Bloomberg Via businessweek.com)

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