China eases procurement protectionism

15 April 2010

15 April 2010 | Nick Martindale

Foreign companies could soon be able to bid for lucrative high-tech contracts with the Chinese government after Beijing made a partial retreat on its protectionist policy.

The Ministry of Science and Technology signified the new stance on government procurement rules in a statement on its website and in comments made by an official.

“National indigenous innovation accreditation will treat equally all businesses in China established according to the law,” the unnamed official said.

The rules initially proposed last year stated that companies wanting to supply the government with new technology must prove the relevant patent was developed solely in China or the trademark first lodged there.

But the new version now says organisations must only show that trademarks and patents were registered in China, in theory allowing non-Chinese based firms to participate.

The original rules had been opposed by both the US and European Union as well as many multinationals, while there had also been concerns that the move could stifle innovation in China.

The apparent retreat by Beijing comes at a time when relations with Washington have improved following a visit by Barack Obama last year.

A spokesperson for the US Trade Representative’s office said the US was studying the new proposals but added that it continued to have broad concerns about the current direction of China’s innovation policies.

A survey by the American Chamber of Commerce in the People’s Republic of China in March found that 57 per cent of US firms doing business in China had expected to lose business as a result of the proposed “indigenous innovation product accreditation” policy, and 37 per cent said this had already happened.

A spokesperson for the European Union of Commerce in China welcomed the news: “This is an important sign that policymakers in China recognise the role that fair competition plays in developing and enhancing China’s high-tech capabilities, and that foreign-invested companies can make a valuable contribution.”

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