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CCTV News: China’s Business Climate

December 8, 2010

This past Friday, I was a guest on CCTV News Dialogue, talking about the business environment for foreign companies in China, and whether they enjoy an “even playing field” with local Chinese competitors, particularly state-owned enterprises (SOEs).  You can watch the show here.

We began by discussing China’s recent move to charge foreign companies the same education and construction surcharges levied on domestic Chinese companies.  I reiterated my comments from a few days earlier, in which I said that it is perfectly fair to expect foreign firms to pay the same taxes as their local counterparts, as long as they also are treated the same when it comes to market access, intellectual property protection, government procurement, and other areas.  All too often, they aren’t.

We then went on to debate some of the main areas of concern, and whether certain Chinese policies (such as the proposed “indigenous innovation” catalog) are designed to exclude foreign competition and protect Chinese “national champions.”  I argued that frequently they are, and that in the long run, this is bad not just for foreign investors, but for China.  I noted that there is growing frustration and concern among the foreign business community in China about the direction the country seems to be heading with these policies.

5 Comments leave one →
  1. December 8, 2010 11:06 pm

    “I noted that there is growing frustration and concern among the foreign business community in China about the direction the country seems to be heading with these policies.”

    They’re already freaked about being copied by Chinese ‘competitors’, bracing for some kind of HK Office. The rest of the ‘Chinese Plan’ sounds exactly like what South Korea did about 30 years ago.

  2. Hua Qiao permalink
    December 10, 2010 2:49 pm

    I see it this way. If the state favors large SOEs over smaller mainland privately owned firms, which it clearly does (even the most nationalistic mainlander would have to agree with that) why would the state hesitate at tilting the playing field away from foreign firms? Unless it is for access to technology or something that the west has that China can’t produce itself. Read the recent WSJ article on Russian military sales to China.

    To assert the Chinese market is open for all competition is like saying its internet is free and open without censorship.

    Keep it up Patrick. I am constantly amazed at your diplomatic ability to get your points across without getting kicked off the set…or worse.

  3. llisa2u2 permalink
    January 15, 2011 2:21 am

    Corruption of business practices is an international problem. Each nation still needs to allow proprietary considerations of internal citizen/state owned, land-based business operations. Fair is fair. If each nation allowed for indiscriminate international ownership within national boundaries, the internal governmental structure and all infrastructures are at risk within any specific nation. Political stability hinges on acknowledged internal economic priorities. Running-the-show anywhere today cannot continue to consist of short-term-profit gainers taking quick and easy indiscriminate or strategic shots for personal results. “Connectivity”, “Strategic Panning”, “Exponential” are not short-term simply defined words. Neither is “Expected Results” and “Unexpected outcomes”.


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