U.S. companies worry about transparency, unfairness
China's anti-corruption campaign is conducive for foreign companies to compete in the domestic market and could help clean up the country's business environment, experts said Wednesday, following the release of a U.S. government report that cited transparency issues over the ongoing campaign and potential unfair treatment as concerns for U.S. companies.
"The anti-corruption crackdown could help level the playing field and will raise foreign capital in China," He Weiwen, an executive council member of the China Society for WTO Studies, told the Global Times on Wednesday.
He's comments came after the U.S. State Department on Tuesday released its Investment Climate Statements for 2016, saying that corruption remains endemic in China, and the lack of an independent press, as well as the fact that all bodies responsible for conducting corruption investigations are controlled by the Communist Party of China (CPC), hamper the transparent and consistent application of anti-corruption efforts.
However, those claims are baseless, He said, because anti-corruption investigation procedures cannot be transparent. Transparency comes to play only when the anti-corruption case is presented in court, and that is the practice as well in foreign countries and regions, he said.
To fight rampant corruption in the medical/pharmaceutical sector, China's health authority issued "black lists" of firms and agents involved in commercial bribery. Several of the blacklisted firms are foreign, the U.S. investment report said.
"Foreign companies are expected to strictly comply with Chinese laws and are forbidden from pursuing business opportunities through bribes," He noted.
In 2014, a Chinese court found UK drug maker GlaxoSmithKline guilty of bribing doctors to prescribe its medicine, according to media reports.
More opening-up
While China was the world's top destination for foreign investment in 2015, broad sectors of the economy remain closed to foreign investors, said the U.S. investment report.
Nearly 500 U.S. companies surveyed in 2015 by the American Chamber of Commerce in China (AmCham China) cited inconsistent regulatory interpretations and unclear laws as their top challenge in doing business in China.
Other difficulties include labor costs, obtaining licenses, the shortage of qualified employees and managers, and industrial overcapacity, according to the 2016 China Business Climate Survey Report AmCham China released in January.
However, member companies recognize the progress that has been made in areas such as intellectual property rights and anti-corruption and are supportive of continued efforts, said AmCham China, noting that the majority of U.S. companies are still optimistic about the Chinese market's growth potential.
"China has remained consistent on opening up its market since the 1980s, and government policies have played a big role in providing greater market access to foreign investors," said Huang Wei, director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.
Huang told the Global Times Wednesday that China's market is not as open as those in developed economies, but the domestic business environment stimulates the growth of foreign capital.
"Overseas companies have not left China because they don't want to lose such a large market," she said, noting that some firms have left China because of the sluggish world economy.
Although China's economic slowdown continues to pose a challenge to both Chinese and European companies, China still remains a vital destination for European firms, with 47 percent reporting that they plan to expand their operations, much lower than 86 percent in 2013, the European Union Chamber of Commerce said in a survey in June.
China must recognize that the opening-up process is slow due to many obstacles posed by firms whose interests would be hampered, and the opening-up task is not easy, said He.
The country is stepping up efforts to promote economic reform and the opening-up of more sectors, even in some high-tech sectors, experts said.
