Equality key to rescuing U.s.-china ties, business group says

BEIJING Recent strains in the relationship between the United States and China make it especially important to establish a policy of “competitive neutrality,” the American Chamber of Commerce in China said on Thursday.

The chamber, long considered a steadying hand in a relationship fraught with geopolitical tensions, has advocated a harder line on China’s trade practices and investment policies over the past few years.

Progress was made earlier this year toward resolving a bitter trade dispute with an initial deal and the rollback of some tariffs, but a blame game on how the COVID-19 pandemic has been handled has raised tensions again.

In a near 500-page long annual white paper, the Chamber, also known as Amcham, listed hurdles to what it described as a truly level playing field that could restore trust and stop a downward spiral in bilateral relations.

U.S. President Donald Trump has long railed at China for not allowing U.S. companies the same access as Chinese companies get in the United States; the chamber said questions were also being raised internationally about the issue.

“Enacting a policy of ‘competitive neutrality’ is especially important given the increasing scrutiny facing the Us-china commercial relationship,” the Amcham said.

Beijing has repeatedly said it treats foreign and domestic firms equally and welcomes foreign investment.

The chamber said long-standing structural issues underlining a lack of transparency in China’s economic system remained unresolved.

“U.S. companies continue to face an uncertain operating environment in China,” said the Amcham, which found in a February survey that nearly a third of U.S. companies had seen revenues slashed as the coronavirus outbreak disrupted activity.

While a new foreign investment law and other measures were encouraging, it said, opaque regulatory processes, the favouring of domestic champions under a state-led development model, and weakness in intellectual property protection continued to hamper the operations of U.S. businesses.

It also expressed concern about the general nature of many of the provisions of the foreign investment law, saying implementation could be sketchy. “Unfortunately, previous bilateral dialogues and other mechanisms have not generated the results that are needed to sustain healthy, balanced, and mutually beneficial economic relations,” said Greg Gilligan, the chairman of Amcham China.

In a sign of Beijing’s greater control, over 50 per cent of U.S. companies surveyed for the white paper said they had been required to establish Communist party cells. However, the survey showed only seven per cent reported a negative impact from having done so, with five per cent saying they had benefited from it.

The white paper detailed operational challenges encountered by sectors alongside a list of recommendations for Chinese policy-makers.