US Companies: Concern About Innovation Policy

BEIJING, March 21 /PRNewswire-Asia/ -- A survey released today by the American Chamber of Commerce in the People's Republic of China (AmCham-China) shows serious concern among US companies about China's indigenous innovation policy. Fifty-seven percent of high-tech and IT companies believe the policy will have increasingly negative effects on their businesses.

Furthermore, even before the full implementation of China's national policy, which might limit products purchased by the Chinese government, 37 percent of high-tech and IT companies report they are losing sales as a result of a broad range of preferential indigenous innovation policies that are already in effect.

In addition, the AmCham-China survey shows that US companies believe they face product discrimination in state-owned enterprise (SOE) purchases, as well as in government procurement. "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. "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 welcomes China's goal of establishing an innovative economy. "We strongly support Chinese innovation," said Mr. Barbalas. "Domestic innovation creates the potential for more partnerships between US and Chinese firms in China and globally. However, limiting market participants and reducing competition does not encourage innovation."

Chamber officials emphasize that improved intellectual property protection, more open and competitive markets, combined with educational, financial and legal system reforms, will bolster and better accelerate these efforts to build an innovative economy.

AmCham-China pointed out that member companies have spent billions of dollars investing in world-class research and development centers. 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. However, the survey results show that member companies believe that some Chinese policies are increasingly restrictive and protectionist in nature. These obstacles could limit foreign participation in China's economy.

AmCham-China said that cooperation remains the best and most productive path. "We appreciate Commerce Minister Chen Deming's recent efforts to reach out to foreign businesses. We welcome his clear statement that foreign- invested companies are to be treated the same as Chinese domestic companies," Mr. Barbalas said. "We are also encouraged by Ministry of Commerce spokesman Yao Jian's recent statement that indigenous innovation policies are not only meant to support Chinese domestic enterprises and SOEs. We look forward to seeing clarifications implemented in the updated policy guidelines and regulations."

The survey was conducted among AmCham-China members in early 2010 so it reflects recent developments in China's innovation policy including an initiative to launch a National Indigenous Innovation Product Catalogue. There were 203 company respondents to the survey.

About the American Chamber of Commerce in China:

AmCham-China is an independent, non-profit organization representing the interests of over 2,600 companies and individuals doing business throughout China. First founded in 1920, it was formally recognized by China's Ministry of Civil Affairs in 1991. The organization has its headquarters in Beijing, with chapters in Central China (Wuhan), Tianjin and Dalian. For more information, visit: http://www.amchamchina.org .

    For more information, please contact:

     Ulan Tuya
     AmCham-China
     Tel:   +86-10-8519-0835
     Email: [email protected]

SOURCE American Chamber of Commerce in China

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