U.S. Ambassador Urges China Not to Interfere in Business

By Terril Yue Jones | November 18, 2011

China should allow domestic and foreign companies to make investment decisions without government interference, the U.S. ambassador to China said on Friday.

Ambassador Gary Locke also said the United States would work to double exports to China by 2015, and that China should liberalize its financial sector.

Locke criticized the Chinese business environment as being opaque and stacked against foreign companies. “The single biggest obstacle is a lack of openness in the Chinese economy,” he said in a speech to a conference in Beijing.

“If this continues, it means there will be fewer opportunities for Chinese businesses,” as well as U.S. and other foreign companies, he said. “We will work with China to create a more level playing field that Chinese companies enjoy in the United States.”

In directing the economy, China stacks the odds against foreign companies seeking markets in the country. “China selects national champions and shuts out foreign competition altogether,” said Locke, who assumed his post in August.

“These doubts could be eased if China … allows foreign and Chinese companies to make investment decisions without government interference,” he said.

The U.S. envoy also called on China to liberalize the financial services sector, from banking to electronic payments. A more open financial sector would put more money in the pockets of the Chinese people, Locke said.

“More opening of financial services to foreign competition will create a more dynamic China.”Greater openness would benefit Chinese as well as foreign companies and hasten economic recovery around the world, he said.

Locke also called for a tougher crackdown on intellectual property theft, which he said was widespread in China. He pointed out that legitimate software sales in Vietnam were greater than legitimate software sales in all of China, whose population is 15 times larger.

Regarding China’s trade surplus, Locke said he would lead five trade missions to Chinese cities over the next year to drum up demand for U.S. products to meet the goal of doubling exports to the country.

At the same time, Washington will seek to increase Chinese direct investment in the United States. Foreign direct investment accounts for 5 million jobs in the United States, Locke said, including employees of Chinese firms.

Locke also sought to reassure Beijing, saying the recently announced deployment of U.S. military forces to Australia is not aimed at trying to contain China.

The deployment of about 2,500 U.S. Marines to Australia has been discussed for years and is not a new development, he said. “There needs to be a realigning of our troops,” Locke said, referring to the winding down of U.S. commitments in Afghanistan and Iraq.

“We need to make sure they can move quickly and effectively for any flare-up,” he said. “This announcement is certainly not aimed at China.”

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