MAY 21, 2010, By Andrew Browne
U.S. Commerce Secretary Gary Locke stepped up criticism of China.
BEIJING—U.S. Commerce Secretary Gary Locke stepped up criticism of China's moves to limit access by foreign companies to its massive government-procurement market, even though it isn't clear whether the U.S. has any legal means to force China to back down.|
Speaking on Friday ahead of a high-level U.S.-China dialogue in Beijing next week, Mr. Locke took broad aim at Chinese policies that he said discriminated against foreign investors, reflecting a growing sense of concern among U.S. companies that say they feel increasingly unwanted in the world's fastest-growing major market.
He made clear that a focus of U.S. concern was Chinese regulations aimed at encouraging "indigenous innovation" by giving priority to domestically developed and patented products in government procurement. U.S. technology companies, in particular, are alarmed that they could be shut out of a procurement market that Mr. Locke said was worth as much as $85 billion each year.
"I'm not going to go into specifics of how we are going to address this, other than that it is a major, major concern to foreign companies and foreign governments, not just a concern for the U.S.," he told a media briefing.
Even as U.S. officials ratchet up their public rhetoric against "indigenous innovation," it isn't clear what actions, if any, it can take to persuade China to reverse course. Although China is a member of the World Trade Organization, it is still negotiating its accession to the WTO Agreement on Government Procurement.
A report on trade barriers issued in April by the Office of the U.S. Trade Representative acknowledged that China is free to maintain its procurement policies even though "they run counter to the liberalization path expected of a WTO member seeking to accede to the GPA."
Faced with a barrage of criticism from foreign investors and governments, China last month published a new set of rules on government procurement that dropped the most controversial clauses, including one that insisted that the intellectual property of products eligible to be listed on government procurement catalogs be "totally independent of overseas organizations or individuals."
Mr. Locke welcomed the modifications, and the fact that China has asked for comments. "However, at the same time they are moving to implement the new proposed policy even before the comment period ends," he said.
He said the policy will be a "significant focus" of the annual U.S. Strategic and Economic Dialogue, to be held Monday and Tuesday. Also attending the meeting will be more than a dozen U.S. cabinet secretaries or agency heads, including Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton.
Mr. Locke said that in meetings with Chinese officials during his current trip to China he raised concerns about restrictions limiting foreign participation in offshore wind farms. However, he pointed out that the U.S. had successfully gotten China to repeal domestic content restrictions on wind turbines.
"We are concerned that as we make progress on one facet—such as on energy—other restrictions crop up," he said.
In a speech to the American Chamber of Commerce in China on Friday, Mr. Locke said that his "overriding concern is that there's not enough transparency, and a lack of a level playing field," in China. He added that "too many government policies openly or implicitly discriminate against foreign firms."
—Shai Oster contributed to this article.