China’s central government is walking on a thin line when it defends itself against recent foreign accusations of protectionism against those foreign firms, tells Shaun Rein in Asia One. Senior executives of foreign firm, including Siemens, Google, General Electric and BASF have taken the lead in criticizing China’s government, something that would be unthinkable, only a few years ago as those firm would fear – rightfully – a backlash.
In Asia One:
‘I think they are emboldened because they feel now many people are coming out to complain,’ said Shaun Rein, managing director of China Market Research Group in Shanghai. …
Rein however said he does not believe the investment environment in China is any worse than it was a decade ago ‘ the market is just far more crucial to the foreign firms present in the world’s most populous country.
‘It’s always been difficult to operate here,’ Rein said.
‘You have always had to transfer technology and have joint ventures, but it is a market that matters now.’
At last weekend’s meeting with German businesses, Wen [Jiabao, China premier] rejected suggestions that the Asian giant did not provide a level playing field to foreign investors and insisted overseas businesses were not at a disadvantage.
Rein said he expected the Chinese government to ease restrictions on foreign firms in the next six to 12 months, as they try to walk a fine line between securing foreign investment and avoiding criticism at home.
‘I think the government is very sensitive to be seen letting foreign companies making money off poor Chinese,’ Rein said.
‘They need to be protectionist for political reasons.’