Consistency a concern for FDI
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Despite optimism about China's overall economic climate, most members of the American Chamber of Commerce in China agreed that inconsistent interpretation and implementation of law has become their top business concern in the country.
"China remains one of the top three foreign direct investment priorities for a great majority of our members. Even though companies still have problems while doing businesses here, there was a consistent message since 1980 that over time China's been moving towards a market economy," Christian Murck, president of AmCham-China, told a group of reporters at a press conference Monday in Beijing.
Nearly four in five respondents surveyed by AmCham- China indicated that their company would expand investment in the country this year.
And more than nine out of 10 survey respondents said that they were optimistic about their company's five-year outlook in China.
Murck believes in the next 30 years, goods and service exports to China from the US will reach $1 trillion, with an equal amount of output value.
However, perception among US firms operating in China "has been growing that the country still lacks the regulatory structure or political will - or both - to implement laws evenly throughout the country, and apply them uniformly to all companies, be they foreign or domestic," AmCham said in a report.
Murck said inconsistent interpretation and implementation of laws dampens US firms' confidence in provincial and municipal governments, and hinders their investment in China's western and inland provinces.
Speaking of some current investment review processes, which start at the local level and then advance to the central level, Murck said the entire process costs time and increases administrative difficulties.
Lawyers said the situation reflected, to some extent, inconsistent interpretation and implementation of laws in China.
Lester Ross, co-partner-in-charge with WilmerHale's Beijing Office, said that if provinces implement laws and regulations consistently with the central government's policies, there should be no need for redundant approval by central authorities.
Besides regulatory concerns, market access barriers and innovation policies are also business concerns of US firms in China.
The State Council said in its latest guidelines for foreign investment released April 14 that it would continue to improve the environment for foreign direct investment (FDI), including encouraging FDI in Central and West China.
