James Delahunty
15 Jun 2010 23:56
Business groups in the United States on Tuesday criticized the Chinese government over policy proposals that they say will discriminate against U.S. and other international companies in the market. The companies represented work with software, clean energy and computer technology, but one proposal in China would encourage government agencies to deal with companies that have produced technology in the country.
The proposal is part of a bunch of policies dubbed "indigenous innovation" that are meant to encourage more technological development in the country. Jeremie Waterman, a senior director at the U.S. Chamber of Commerce, testified before the U.S. International Trade Commission (ITC).
He argued that the policies are being proposed to provide advantages to domestic companies and products, to "force technology transfer if foreign players choose to participate." In April, China allowed foreign companies to compete for government business following pressure from Washington.
Not everyone agrees that the Chinese proposals will be bad for U.S. or other foreign companies however. Lee Branstetter, an economics professor at Carnegie Mellon University, points out that none of the policies are even in place yet and may not turn out to be as harmful to U.S. companies as they think.
Instead, he argues that some of the proposals, such as increasing support for Chinese universities, encouraging venture capital and underwriting joint research programs with foreign companies and Universities may benefit U.S. companies in the market.
U.S. Treasury Secretary Timothy Geithner has raised the issue during high-level talks in Beijing, and told the Senate Finance Committee that China agreed to discuss the issue over the coming weeks and months.