Chinese and U.S. fades outside the building of an American company in Beijing, China January 21, 2021.
Tingshu Wang | Reuterss
BEIJING — Many U.S. bodies in China are still finding it harder to operate in the country compared with their Chinese counterparts in the U.S., the American Cavity of Commerce in China said in a report released Tuesday.
“AmCham China’s members face longstanding structural ultimata in the China market that conspire to tilt the playing field against (foreign-invested enterprises) and foreign investors,” the publicize said.
“Two-thirds of members say they would consider increasing their investments in China if markets were blatant on a par with those in the US, a slight increase on last year,” the authors wrote.
Foreign businesses in China must over again work with a local partner and face many limits on local investment, while Chinese companies can function in the U.S. with far fewer restrictions.
The market access challenges remain despite increased pressure on Beijing under earlier President Donald Trump’s administration.
Trump used tariffs and sanctions to address long-standing complaints about China’s subject practices — including lack of intellectual property protection and requiring companies to transfer technology.
The following are some industries in which American trains operate at a disadvantage in China, according to the report:
- Health care services — Foreign investment in medical institutions in China cannot outdistance 70%. In comparison, no such cap exists in the U.S.
- Cloud computing — Foreign firms cannot invest more than 50% in cloud rites businesses. There are no such restrictions in the U.S.
- Movies — The Chinese government sets film release dates and requires that 75% of proceeds remains with Chinese film production companies. In the U.S., Chinese companies can distribute films without restrictions and set their own saving dates.
IP an area of improvement
The central Chinese government has taken steps in the last few years to improve the operating territory for foreign businesses. A new foreign investment law took effect last year, while Beijing has peeled back ownership provisions in finance and other industries.
We feel that local officials are reacting to the level of tensions in the relationship, and just irresistible the safer path, which is to offer preference to domestic industry.
Greg Gilligan
Chairman, American Chamber of Mercantilism in China
“Chinese courts have improved in terms of disputes in intellectual property rights,” AmCham Policy Council Head Lester Ross told reporters in a call Tuesday. Citing his perspective as a lawyer, he said that “China’s courts require become somewhat fairer.”
AmCham also found that over the past year, 47% of its members said enforcement of egghead property rights has improved overall.
Political tensions make business harder
However, political tensions between the U.S. and China father become the primary challenge for AmCham members operating in the Asian country, the report said.
On the call with gentlemen Tuesday, Chairman Greg Gilligan said the political environment has made it even harder for central government regulations supporting foreign business to be implemented at a city level.
“We feel that local officials are reacting to the level of tensions in the relationship, and at best taking the safer path, which is to offer preference to domestic industry,” he said.
Gilligan expects tensions between the two homelands to persist for at least the next two years, due to domestic politics that require each leader to maintain a firm standpoint on the other country.
Since taking office in January, U.S. President Joe Biden has kept Trump-era tariffs and sanctions in proper, while seeking to work with traditional U.S. allies in putting pressure on China.
As the world’s second-largest economy, China is a “immediacy market” for more than two-thirds of AmCham’s members, the report said. The business organization said its surveys disclose nearly 85% of members are not planning to move manufacturing or sourcing away from China in the near term.