Companies that do Chinese business in the U.S. suffer when relations between governments deteriorate, Amcham said.
China’s American Chamber of Commerce has said it should implement the promise of equal treatment for foreign products and abandon “underlying” guidelines for replacing foreign products, according to China’s American Chamber of Commerce.
In an annual white paper on Tuesday, the chamber, known as MCHAM, called on the United States and China, representing 900 organizations, to further communicate and cooperate on climate change and public health.
Relations between the world’s two largest economies have deteriorated rapidly over the past few years, ranging from trade to issues related to China’s response to COVID-19.
When relations deteriorate, U.S. firms will see poor enforcement of equitable treatment regulations for foreign businesses, affecting approval of investment projects and market access, says Greg Giligan, chairman of Emcham China.
“We feel that local officials are responding to the level of strain in the relationship and are taking the safe route of prioritizing the domestic industry,” he told a news conference on Tuesday.
He said American companies were also “reasonably concerned” about the possibility of consumer boycotts in China and needed to plan a scenario for that, he said.
In March, Sweden’s H&M and other foreign brands met with intense online reactions and boycotts after raising concerns about forced labor in China’s western Xinjiang region.
The business firm said in a paper that both nations should reduce their “ineffective rhetoric” and reopen the line of communication.
Equal treatment is applied unevenly
China’s foreign businesses have long complained of limited market access, opaque regulatory mechanisms, bias from domestic champions and state-owned enterprises, and weaknesses in intellectual property protection.
Beijing has repeatedly said it treats foreign and domestic firms equally and welcomes foreign investment. Meanwhile, the government is trying to stimulate domestic innovation and reduce dependence on foreign technologies and markets.
The law, which promises equal treatment for foreign and domestic companies, has only been unequally enforced, calling for the opening up of emerging sectors such as cloud computing to foreign companies.
It states that “the government should use the underlying, unpublished, or internal guidelines to replace the United States or other foreign-made products / services with domestic-made equivalents.”
US President Joe Biden says competition with China is a foreign policy challenge facing the United States. Democrats and Republicans alike have moved to a tougher line on Beijing.
A survey published in March found that U.S.-China tensions were seen as a challenge to do business in China for the 6 percent of companies run by MCham.
U.S. Trade Representative Katherine therefore said last week that she expected Beijing to engage with Chinese officials “in the near term” to evaluate the implementation of the first-stage trade agreement between the two countries to influence the fate of Washington’s punitive tariffs.
Since the start of the tariff war between the two in 2011, former US President Trump and other senior officials in the Biden administration, including Tai, have been conducting top-down reviews of US-China trade policy.
The deal, which expires in late 2021, calls on China to increase US export purchases by 200 billion in two years – far behind the Beijing summit, partly due to the coronavirus epidemic.
China has pledged to tighten protection of intellectual property, and improve access to agricultural biotechnology and financial services for U.S. companies.