Beijing, May 11, 2021 – The American Chamber of Commerce in China (AmCham China) today releases the 23rd edition of the American Business in China White Paper, which sets forth a significant number of policy recommendations – both cross-sector and industry-specific – for the Chinese and US governments. Additionally, the White Paper lays out AmCham China’s three main policy priorities for 2021, which provide the foundation for these more specific recommendations.
Despite the COVID-19 pandemic, US-China economic relations remain deeply intertwined, with two-way bilateral trade in goods totaling US $560 billion in 2020. However, many of the guardrails in the US-China relationship were further damaged and the bilateral relationship continued to deteriorate in all spheres, including economic and trade, national security, law enforcement, news and media, and people-to-people bilateral exchange. The COVID-19 pandemic accelerated many of these trends, deepened mistrust between the two sides, and led to a renewed focus on supply chain security, reshoring, and domestic manufacturing. Meanwhile, many longstanding economic and commercial issues that plague the foreign business community remain unaddressed, including China’s long-standing support for its SOEs, preferential treatment for domestically-invested enterprises, preferences for domestic technologies and products over foreign technologies and products in the procurement process, strict cybersecurity and data localization requirements, and cyber intrusions.
“China’s success at controlling COVID-19 domestically is commendable and has played a large part in ensuring our member companies were able to resume regular operations in China by the middle of Q2 of 2020,” said Greg Gilligan, the chairman of AmCham China. “Even so, COVID-19 created many challenges for our members with respect to their business operations. Among the most significant have been global travel disruptions stemming from restrictions imposed to control the spread of COVID-19. China temporarily banned foreigners holding valid residence permits from entering the country, while the US restricted its own visa services in China and many parts of the world. This left many business executives, families, and teachers outside of China unable to return and drastically reduced the level of business and people-to-people exchange taking place between the US and China and around the world.”
In last year’s White Paper, we noted that 2019 had been a turbulent year due to the imposition of bilateral tariffs and deteriorating bilateral relations. Events in 2020 only served to compound those trends, while COVID-19 created a whole new set of challenges. A majority of our members reported “US-China bilateral tensions” had become the top challenge to doing business in China. Consequently, AmCham China acknowledges that the US-China relationship is undergoing a fundamental recalibration and acknowledges the legitimate right of all countries to define and protect their national security. While bilateral tensions and the presence of tariffs have pushed member companies to review their operations in China, our members generally remain committed to the China market, but urge the Chinese government to institute further reforms to implement its commitments to equal treatment for foreign and domestic enterprises with respect to market regulation. In order to be globally competitive, American producers and service providers must be able to compete in the China market on a level playing field. While China’s Foreign Investment Law, enacted January 1, 2020, promises equal treatment for foreign-invested enterprises (FIEs) in a number of important respects, implementation of its provisions remains uneven and we note that much work remains to be done in order to achieve a fully level playing field for FIEs and domestically-invested enterprises in the China market.
In that spirit, this 23rd edition of the White Paper explores the cross-cutting, industry-specific, national, and regional issues faced by AmCham China’s member companies in 2020 and early 2021. Each chapter offers practical recommendations for addressing challenges facing the American business community that will, if implemented, benefit both foreign-invested enterprises (FIEs) and the Chinese economy. We hope that this year’s White Paper will serve as a constructive tool for both the Chinese and US governments to build on the progress established by the Phase One Agreement and reorient the bilateral relationship towards a more sustainable and balanced economic footing. Underlying the recommendations included in this White Paper are three “Policy Priorities” that provide the framework for AmCham China’s advocacy in 2021. They are:
- Build a healthy working relationship through results-focused engagement. Rebuild mechanisms for communication at all levels to increase the frequency of interaction between both sides and reduce the level of unproductive rhetoric that has characterized bilateral exchanges over recent years. Restart professional communications and negotiations. Ensure that these mechanisms are results-oriented and focus on the substance of the dialogue rather than the label or process associated with such dialogue. AmCham China’s continuing role is to communicate the reality of operating in the Chinese market in an accurate, objective, and timely manner to our counterparts in both governments and to provide a platform for continued engagement.
- Ensure that rhetorical commitments to “national treatment” and a level playing field for FIEs operating in China are met with faithful implementation on the ground. Ensure market access commitments are accompanied by actions that guarantee a level playing field for all firms, regardless of the nationality of their shareholders. Abandon the use of implicit, unpublished, or internal guidance to replace US or other foreign-made products/services with domestically-made equivalents. Implement the commitments made as part of the Phase One Agreement and Foreign Investment Law to protect IP and remove any prerequisites for technology transfers as a basis for market entry. Prioritize coordinated and consistent policy development, implementation, and enforcement between Chinese government ministries.
- Identify and develop patterns of cooperation on issues of global commons, particularly public health and climate change. Cooperate in areas of global commons. Identify opportunities to strengthen global public health infrastructure so that the world is better prepared for the next public health crisis. Cultivate conditions to promote bilateral FDI and trade and help the global economy recover from COVID-19. Reduce greenhouse gas (GHG) emissions and combat climate change. Involve the business community and leverage its technology, expertise, and experience in future public health or climate change initiatives. To download the 2021 American Business in China White Paper, please go to the Portal here (free for members, under the Publications tab). To join AmCham China, please contact the Membership team at email@example.com. To purchase the White Paper directly, please click here.
To download the 2021 American Business in China White Paper, please go to the Portal here (free for members, under the Publications tab). To join AmCham China, please contact the Membership team at firstname.lastname@example.org. To purchase the White Paper directly, please click here.
About AmCham China – US-China Business: The Next 100 Years
The American Chamber of Commerce in the People’s Republic of China (AmCham China) is a non-profit, non-governmental organization whose membership comprises 4,000 individuals from 900 companies operating across China. The Chamber’s nationwide mission is to help American companies succeed in China through advocacy, information, networking, and business support services. In addition to our headquarters in Beijing, AmCham China serves Tianjin, Central China, and Northeast China through our Chapters in Tianjin, Dalian, Shenyang, and Wuhan. Across the five offices, AmCham China has more than 30 working groups, and holds more than 150 events each year. For more information, visit: www.amchamchina.org
For more information, please contact: Mark Dreyer, Marketing & Communications Director, AmCham China email@example.com