About Face!
It isn’t news when business organizations complain about protectionism in China – or that China complains that the rest of the world is out to protect against them. For more on that, see my recent post on Broken Promises.
Trade concerns can last a long time.
But it is news when outfits that previously defended China seemingly change their minds. I was catching up on my reading this weekend when I noticed that both the U.S.-China Business Council and the U.S. Chamber of Commerce testified Friday that China is getting more protectionist. Their testimony was to the Trade Policy Staff Committee, an interagency group chaired by the Office of the U.S. Trade Representative that is instrumental to formulating U.S. trade policy. (Full disclosure: I used to speak for the Commerce Department at TPSC meetings, which is why I read strange stuff like this.)
The testimony was pretty even-handed, but was notable for statements that China’s product standards requirements, import licensing and contracting rules are getting noticeably more protectionist. While the Chamber and the Council are worried about protectionism against China, too, these were notable statements from organizations that have long been cheerleaders for China’s importance as a market for American goods and services.
John Frisbie, the U.S.-China Business Council’s president, cited a soon-to-be published survey of the Council’s 220 members (Fortune 500-type companies) in which 80% of its members said they are worried about protectionist trends in China. That said, the same survey finds that some 84% of the members’ investments in China are making profits and that sales to their affiliates in China amounted to more than $100 billion in 2008. Clearly, these companies are not abandoning China, nor are they looking for retaliation against China. They are concerned. So am I when I hear it from them.
