Ambassador Locke Says China’s Policies ‘Causing Growing Frustrations’
a press conference ahead of the 2011 Summer
Davos Forum at Furama Hotel last week in Dalian, Liaoning Province China. Locke
called on Beijing to dissolve barriers for foreign companies seeking to do
business there. (ChinaFotoPress/Getty Images)
Gary Locke, the U.S. ambassador to China, took a shot at the business climate
in the world’s most populous country on Tuesday, by calling on Beijing to
dissolve barriers for foreign companies seeking to do business
Locke cited the undervalued yuan, expansive government
restrictions on the business environment,
Internet censorship, and unrestrained piracy and theft of intellectual property
as major threats to long-term cooperation between the two nations while slowing
down global economic
Speaking in Beijing at the American Chamber of Commerce to a
number of business leaders, Locke said
restrictions set up by the Chinese regime are “causing growing frustrations
among foreign business and government
leaders, including my colleagues in Washington.”
Locke, the former
secretary of commerce, praised China’s economy for growing rapidly over the past
three decades but said its policies are returning to communist-style state and
industrial planning, where the government had an expanded role in overseeing the
Foreign investors face a large number of restrictions in
participating in a number of industries in China, including health care, energy,
and others, Locke added. He said that a lack of openness between the Untied
States and China is sowing “seeds of doubt” among foreign investors as to
whether to invest in the country.
“The growth model China has relied on
for the last 30 years—one predicated on low-cost exports to the rest of the
world and investment in resource-intensive heavy manufacturing—cannot serve it
well in the next 30 years,” he said in his second speech as the ambassador to
China, a post he took in August.
The European Chamber of Commerce in
China earlier this month said the world’s second largest economy still imposes
discriminatory laws and rules on businesses in Europe, favoring domestic
companies instead. Over the years, a number of foreign businesses have similarly
complained of incessant restrictions.
To deal with objections raised by
investors, China should allow foreign and local businesses to make investment
decisions being interfered with by the regime and do away with practices that
require “joint ventures,” he added.
Locke touched on the sensitive issue
of regime-mandated Internet censorship, saying the Chinese economy is becoming
more and more dependent on citizens’ rights to freely access information.
Censorship would negatively impact the Asian country’s ability to compete with
“If China’s businesses, entrepreneurs, academics,
scientists and researchers, students, and even ordinary citizens aren’t able to
fully participate in the international marketplace of ideas, then China as a country, and as an
economy, will fail to realize its full potential,” he added.
many economists’ belief that China’s currency is undervalued, Locke urged
Beijing to allow the yuan to appreciate at a quicker pace against the U.S.
dollar and the currencies of other major trade partners.
noted, is a major area where China can improve as only eight cents worth of
legal computer software was sold in the country for every $1 of computer
hardware. In the United States, 88 cents of legal software is sold for every $1
He noted that around 80 percent of Chinese software is
“I have heard from so many Chinese-owned companies who
have devoted significant resources to develop new products and technologies," he
said. “And they complain they were almost wiped out by others illegally copying
their ideas and technology.”
Locke is the first American-born Chinese
person to serve as the ambassador to Beijing and made headlines in China due to
his humble behavior. A photograph emerged showing Locke carrying his own luggage
and purchasing his own coffee at a Seattle airport Starbucks before he flew
economy class to Beijing.
Chinese netizens were enamored with the photo, saying
his actions did not resemble that of a high-level diplomat who lives a life of
luxury. In another incident, Locke also refused VIP treatment and flew coach.