Businesses forced to hand over technology and accept Chinese partners
Posted by Author on August 22, 2010
By He Qinglian, Chinese economist, Via The Epochtimes, Aug. 21, 2010 –
Foreign businessmen in today’s China live in fear. Other businesses smugly observed and waited out the face-off between Google and the Chinese regime, assuming Google had overestimated its clout.
If Western businessmen were smirking at Google’s predicament, the publication of the Chinese regime’s “Several Opinions of the State Council on Further Doing a Good Job in the Utilization of Foreign Investment” wiped that smirk off their collective faces. The gist of the article: “The age of unconditional priority given to foreign investments in China” is now over.
Some foreign investors still dream of yesteryear’s privileges, hoping Chinese officials would listen and reconsider. This time they aired their dissatisfaction publicly instead of resorting to private lobbying.
The American Chamber of Commerce (China) and the European Union Chamber of Commerce in China have published reports. These reports show the deep concern from the American and European business community over China’s protectionist policies.
On July 7, The World Bank Group published its 2010 report “Investing Across Borders,” listing China as one of the countries with the greatest limits on foreign investment. In mid-July, a number of international companies publicly criticized China’s commercial climate in a meeting with Premier Wen Jiabao. The companies included Siemens and BASF.
The foreign companies’ chief dissatisfactions falls in three areas.
First, their intellectual property is not protected. New rules force foreign companies to hand over trade secrets and new technologies to their Chinese partners in exchange for a market share.
Second, foreign investment companies, unlike their Chinese counterparts, are treated unequally in state bids.
Third, China has many rules applying to mergers and acquisitions. Foreign companies are required to partner with Chinese businesses, and the split must be 50-50.
Chinese officials, led by Premier Wen Jiabao, have disputed these barriers. Liu Yajun, director of the Department of Foreign Investment Administration of the Chinese Ministry of Commerce, rejected the World Bank’s findings at a press conference.
Minister of Commerce Chen Deming told the U.K.-based Financial Times that China repeatedly lowered the entry barrier for foreign companies since it joined the WTO, and many international companies severely affected by the global financial crisis have found new revenue sources in China…...(more details from The Epochtimes)
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