When ties between governments deteriorate, American companies that do business in China suffer, AmCham says.

China should implement its commitments to equal treatment for foreign companies and abandon “implicit” guidelines to replace foreign products with domestic alternatives, the US Chamber of Commerce in China said.

In an annual white paper released on Tuesday, the chamber, also known as AmCham, which represents 900 companies, also called on the United States and China to communicate more and cooperate on climate change and public health.

The relationship between the world’s two largest economies has deteriorated rapidly in recent years on issues ranging from trade to China’s response to COVID-19.

When ties deteriorate, US companies see poorer implementation of regulations promising equal treatment for foreign companies, affecting the approval of investment projects and market access, said Greg Gilligan, President of AmCham China.

“We believe local officials are responding to levels of tension in the relationship and are simply taking the safest route of offering preference to domestic industry,” he said at a press conference on Tuesday. .

US companies were also “rightly concerned” about the possibility of a consumer boycott in China and had to do scenario planning for it, he said.

In March, Sweden’s H&M and other foreign brands faced a backlash online and boycotts after expressing concerns about forced labor in China’s western Xinjiang region.

The trade organization said in the document that the two countries should reduce their “unnecessary rhetoric” and reopen the lines of communication.

Equal treatment unequally implemented

Foreign companies in China have long complained about limited market access, opaque regulatory processes, the preference of domestic champions and state-owned enterprises, and weak intellectual property protection.

Beijing has repeatedly stated that it treats foreign and domestic companies equally and welcomes foreign investment. The government is also trying to stimulate domestic innovation and reduce reliance on technology and foreign markets.

Legislation promising equal treatment for foreign and domestic companies is only implemented unevenly, according to the newspaper, which also called for opening up emerging sectors such as cloud computing to foreign companies.

“The government should abandon the use of implied, unpublished or internal guidelines to replace US or foreign products / services with locally made equivalents,” he said.

US President Joe Biden has said competing with China is the biggest foreign policy challenge the United States faces. Democrats and Republicans have moved to take a harder line on Beijing.

US-China tensions were seen as a challenge to doing business in China for 78% of companies polled by AmCham, according to a poll released in March.

U.S. Trade Representative Katherine Tai said last week she plans to engage “in the short term” with Chinese officials to assess their implementation of the phase 1 trade deal between the two countries, with the result of influencing the fate of Washington’s punitive tariffs on Beijing.

Tai and other senior officials in the Biden administration are leading a top-down review of US-China trade policy after former US President Trump launched a tariff war between the two in 2018. Washington and Beijing signed off the phase 1 trade agreement in January 2020.

The pact, which expires at the end of 2021, called on China to increase its purchases of US exports by $ 200 billion over two years – a target Beijing is far from reaching, in part because of the coronavirus pandemic .

China has also pledged to strengthen intellectual property protections and improve access to agricultural biotechnology and financial services for US businesses.

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