'US companies finding it harder to operate in China'
May 14, 2021
Beijing [China], May 14 : Many American companies are still finding it harder to operate in China compared with their Chinese counterparts in the United States, the US Chamber of Commerce in China said in a report.
"AmCham China's members face longstanding structural challenges in the China market that conspire to tilt the playing field against (foreign-invested enterprises) and foreign investors," CNBC quoted the report.
"Two-thirds of members say they would consider increasing their investments in China if markets were open on a par with those in the US, a slight increase on last year," the authors wrote.
Foreign businesses in China must often work with a local partner and face many limits on local investment, while Chinese companies can operate in the U.S. with far fewer restrictions.
Health care services, cloud computing and movies are some industries in which American companies operate at a disadvantage in China.
In Health care services, foreign investment in medical institutions in China cannot exceed 70 per cent. In comparison, there is no such cap in the U.S.
Meanwhile, foreign firms cannot invest more than 50 per cent in cloud services businesses. There are no such restrictions in the US. When it comes to movies, the
Chinese government sets film release dates and requires that 75 per cent of revenue remains with Chinese film production companies.
In the U.S., Chinese companies can distribute films without restrictions and set their own release dates.
"We feel that local officials are reacting to the level of tensions in the relationship, and just taking the safer path, which is to offer preference to domestic industry," said Greg Gilligan, Chairman, US Chamber of Commerce in China.
"Chinese courts have improved in terms of disputes in intellectual property rights," AmCham Policy Committee Head Lester Ross told reporters in a call Tuesday. Citing his perspective as a lawyer, he said that "China's courts have become somewhat fairer."
