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AMCHAM Blasts China’s ‘Opaque’ Investment Rules

AMCHAM Blasts China’s ‘Opaque’ Investment Rules

Los Angeles, CA – A major US trade promotion group is asserting that Beijing is targeting foreign companies “with opaque laws and rules that contribute to a deteriorating environment for investment.”

According to the American Chamber of Commerce in China (ACCC), 60 percent of those US-based businesses that responded to a recent survey said they feel foreign businesses “are less welcome in the country than before” – up from the 41 percent of respondents in a previous survey conducted in late 2013.

In addition, the group said, 49 percent stated that foreign companies are being “singled out” in the Chinese government’s ongoing pricing and anti-corruption campaign, which, many of those surveyed said, is “politically motivated and threatens to exacerbate a decline in foreign direct investment in the world’s second-largest economy.”

ACCC members say they have “growing perceptions that multinational companies are under selective and subjective enforcement by Chinese government agencies,” according to ACCC Chairman Greg Gilligan.

The country’s laws and rules, he said, “lack transparency and are at times only vaguely related to the particular case.”

Dozens of foreign companies “are being targeted in probes, with regulators opening an anti-monopoly investigation into Microsoft Corp. in July and state media accusing Apple Inc. of using its iPhone to steal state secrets, said Gilligan, who serves as Vice President and Managing Director for PGA Tour China.

In an interview with the state-run China Daily newspaper, Xu Kunlin, the head of China’s National Development and Reform Commission’s anti-monopoly bureau, called the charges that the country is specifically targeting foreign companies “groundless and baseless.”

Xu’s reactions were echoed by a spokesman for the Foreign Ministry in Beijing, who said that China’s anti-monopoly measures “are transparent, fair and done in accordance with the law.”

China, the spokesman said, “will as always welcome foreign companies and enterprises to develop cooperation in all fields and build a good market economy. At the same time, we request foreign companies observe Chinese laws while in China.”

American Chamber members have “concerns that rules are shifting again for foreign companies in China in ways that are highly opaque and difficult for local managers to anticipate or adapt to,” according to the ACCC’s Gilligan.

The group’s members, he said, “strive hard for full compliance and need support and greater clarity to achieve that goal.”

The ACCC’s membership representatives from more than 1,000 US-based companies of all sizes including Microsoft, Johnson & Johnson, Dell, Oshkosh, Qualcomm, and Mead Johnson.