U.S. Chamber of Commerce Issues White Paper Condemning China’s Unfairness to Foreign Companies

On Tuesday (May 11), the American Chamber of Commerce in China (AmCham China) released its 2021 White Paper on U.S. Companies in China, in which it noted that despite Beijing’s announced policy of equality between Chinese and foreign companies, foreign companies continue to suffer “invisible” injustice and are repeatedly targeted for repression in China.

The White Paper on U.S. Companies in China cites Beijing’s stated commitment to equal treatment of foreign and domestic companies, but the implementation process has been fraught with imbalances. Greg Gilligan, president of the American Chamber of Commerce in China, said that when relations between China and the United States deteriorated, U.S. companies found that China’s promised regulations for equal treatment of foreign companies were not working, and that approval of investment projects and market access for foreign companies were negatively affected.

“The government should abandon the use of implicit, unpublished or internal guidance that substitutes equivalent products/services made domestically for those made in the United States or other foreign countries,” the report states.

The American Chamber of Commerce in China is a nonprofit organization representing 900 U.S. businesses, and its membership includes 4,000 U.S. business people operating in China.

“We feel that local officials have reacted to the level of tension between the two countries by tending to take a ‘safer approach’ of prioritizing domestic industries,” Gilligan said at a news conference Tuesday. He argued that U.S. companies are also “rightfully concerned” about the possibility of a consumer boycott in China.

According to a survey released in March by the U.S. Chamber of Commerce, 78 percent of companies surveyed viewed U.S.-China tensions as a challenge to doing business in China.

In March, Sweden’s H&M and other foreign brands faced a nationwide boycott instigated by Beijing after raising concerns about forced labor camps in Xinjiang. Tesla’s recent “brakegate” at the women’s Shanghai Auto Show, which sparked lopsided negative coverage in the Communist Party’s official media, has also been cited as a case of foreign companies being hit in China.

Eliminating mandatory technology transfer is a key goal of U.S. negotiators in the U.S.-China trade war, and the issue remains unresolved. Last year, the Communist Party implemented a new Foreign Investment Law that promises to address technology transfer and intellectual property issues. But related concerns remain.

In May 2020, Communist Party President Xi Jinping stated that China should adopt a “double-circle model” (DCM) to help insulate its economy from external shocks, advocating the promotion of domestic industries and reducing China’s dependence on imported technology and foreign talent.

The U.S. Chamber of Commerce report said, “The announcement on the DCM has raised concerns among the business community that China will prioritize the acquisition of key technologies and not allow (foreign companies) to compete fairly in China with their technologies.”

The report also noted that foreign companies in China have long complained about limited market access, opaque regulatory procedures, favoritism toward state-owned enterprises and weak intellectual property protection.