China should level the playing field for foreign businesses
Talks between Beijing and Washington this week reached accord on a number of global issues, but doubts remain about how friendly China is towards overseas firms
Wide-ranging, high-level talks between China and the US come around annually regardless of spats that punctuate day-to-day relations. The Strategic and Economic Dialogue puts into perspective the most important relationship of the 21st century. Some observers have hailed the latest round in Beijing this week as the most productive yet. Even incremental progress on a few sensitive issues can elicit such optimism. The reality is that on hardline issues, there was little or no progress. With the political and economic uncertainty created by the election of a new American president within five months, that is not surprising.
On the economy, US officials welcomed reaffirmation of a Chinese commitment to refrain from competitive devaluation of an already weakening yuan, and a pledge not to target an expansion of a steel industry blamed for a world market glut. On the diplomatic front, there is commitment to apply the latest United Nations Security Council sanctions on North Korea. But there was no softening on issues most likely to set back relations, such as China’s claims over disputed territory in the South China Sea. That said, the Strategic and Economic Dialogue promoted cooperation on a whole range of issues that trouble a globalised world, such as climate change, nuclear proliferation and security, cybersecurity, law enforcement, the fight against corruption and terrorism, peacekeeping, environmental protection, Asia-Pacific relations, and securing peace and stability in Afghanistan among other Middle Eastern flashpoints.
The latest dialogue has enhanced mutual understanding and helped solve some long-standing issues. Unfortunately, they do not include what US officials and Western businessmen see as an increasingly unfriendly Chinese business environment of complex regulations and barriers. The European Union Chamber of Commerce in China timed the release of a survey of its members’ concerns to coincide with the US-China talks.
The once favourable climate for foreign investment has tilted the other way. To be sure, Chinese companies have their own complaints about barriers to investment in strategic overseas assets, but that is not the reason for anti-competitive measures at home. Amid current uncertainties including Beijing’s appetite for economic restructuring to ensure sustainable growth, there is room for China to inject a positive note by reflecting on the perception of an unwelcoming attitude to foreign business that does nothing for its integration into the global economy.