Survey: Many U.S. Firms In China Feel Unwelcome

More than a third of American high-tech companies in China feel unwelcome, according to a survey by the American Chamber of Commerce in Beijing. This figure is the highest in four years and is a 12 percent jump from December. Most say the main problem is inconsistent interpretation of regulations.

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The business headlines out of China aren't exactly good news for the West these days. Yesterday, it was Google's high profile exit. Today, the end of a bribery trial of employees of Rio Tinto, one of the leading suppliers of iron ore to China's steel mills. Foreign companies, all in all, are feeling a chill, as NPR's Louisa Lim reports from Shanghai.

LOUISA LIM: China was once lauded as the land of opportunity, but today, foreign companies appear to be getting cold feet. An American Chamber of Commerce survey shows 38 percent of respondents feel increasingly unwelcome in China. One factor is indigenous innovation policies which give preferential treatment to homegrown Chinese technology. AmCham-China President Michael Barbalas says these are spooking American companies.

Mr. MICHAEL BARBALAS (President, AmCham-China): I think what they're concerned about is their access to the marketplace and whether China, in the long run, is really committed to having open markets for trade and investment, or whether there's going to be various forms of protectionism.

LIM: The president of the European Chamber of Commerce, Joerg Wuttke, says his members report a steady buildup in frustration and dissatisfaction.

Mr. JOERG WUTTKE (President, European Chamber of Commerce): The image that we have very often is that the pie gets bigger, the Chinese economy is booming -8.7 percent last year - but the access, the door to the market gets more narrow. We lament about this because many of us have buildup supply chains and are really willing to invest more, but the mood has changed.

LIM: Other major concerns continue to be an inconsistent regulatory environment and a lack of action on intellectual property protection. Competition from local companies is growing, and being a foreign company is no longer enough, according to management consultant David Wolf.

Mr. DAVID WOLF (Management Consultant): For a long time, the red carpet was rolled out for us. But these days, it's starting to feel like the red carpet's been rolled up, the door is closed. It's not quite locked, but it's a lot more effort to sort of get in and do business than it used to be.

LIM: Marco Gervasi of business consultancy Red Synergy says American companies sometimes fail because their strategy isn't flexible enough.

Mr. MARCO GERVASI (Red Synergy Business Consulting): The arrogance is that when you come here and you realize that your strategy doesn't work, you blame the country, saying that the country doesn't play by the rules. And you don't understand that you have to adapt to this, and not the other way around.

(Soundbite of applause)

LIM: China, too, is aware that business leaders are getting nervy. On Monday, Premier Wen Jiabao tried to calm nerves, meeting CEOs in the Great Hall of the People. It's perhaps a sign of China's growing clout that some of these executives paid $100,000 for this privilege.

Louisa Lim, NPR News, Shanghai.

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