China’s regulators have been scrapping preferential treatment of local firm to win procurement contracts from the government, originally meant to strengthen indigenous innovation. “It is a sign the government is listening to the needs of foreign companies,” says Shaun Rein in the China Daily.
Shaun Rein, managing director of Shanghai-based China Market Research Group, said the decision is important for the Chinese government because “it shows they are listening to the needs of the foreign business community by removing barriers”.
“The government is listening and adhering to global standards and laws and is intent on continuing to create a favorable investment environment for foreign firms,” Rein said.
China’s indigenous innovation policies are part of an effort to increase the level of domestic innovation and have been a key component to China’s economic development for several years.
But a revised policy in late 2009 to prevent companies that hold property outside China from winning government contracts caused more controversy. More than 30 industry groups, from most of the world’s major technology firms, wrote a letter to the Chinese government expressing their concern over the government procurement measures.
“These policies caused a lot of fear that China was becoming hostile to foreign investment and was becoming protectionist,” Rein said…
Rein said China needs to wield its soft power more effectively.
“The past year and a half has been a tough time for China’s image in the world stemming from the Google incident. The government more proactively needs to show why China is a great place to invest,” Rein said.
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