US Treasury Secretary Timothy Geithner has sought level playing field for American companies in China.
Ahead of his visit to China next week along with Secretary of State Hillary Clinton, for the US-China Strategic and Economic Dialogue, the Treasury Secretary said that the American companies are at a disadvantage now because of the preferences being given to the Chinese companies in the country.
"Our challenge is to help make sure that China does more to protect intellectual property rights and reduces subsidies and other preferences to domestic companies. We want China to give American firms the same opportunities to compete in China that Chinese firms face in the US. This is a simple principle of fairness," Geithner said.
The Treasury Secretary said US need to continue to work to make sure that American companies are competing on a level playing field.
"The economic part of our agenda in Beijing will focus on reducing the challenges faced by American companies trying to export to China and to produce in China. China, like all countries, is working to encourage more innovation by Chinese companies," he said.
As part of a programme they call "indigenous innovation," China recently proposed a programme where the government would compile a list of what qualifies as innovative products, and provide advantages to the companies that make them, Geithner said.
Those benefits would include preferential treatment in government purchases. Products exported to China from the US might not be eligible for those benefits. Even products produced by American firms that operate within China may not make the cut, he added.
"American companies are very concerned that this approach has the potential to discriminate against foreign-made products and could disadvantage American exporters and investors as they compete with Chinese firms. We share those concerns. The Chinese government has taken some steps to address these concerns, but we have some more work to do in this area," the Treasury Secretary said.
Geithner said American exports to China are growing much more rapidly than exports to the rest of the world.
"Compared to the first quarter of 2009, our exports to China went up by almost 50 per cent while exports to the rest of the world went up by 20 per cent. That's happening because China is growing fast, faster than the rest of the world. But this is happening also because China is changing how it grows," he said.
Noting that after decades of reliance on exports for economic growth, China is now shifting its development strategy to rely more on domestic consumption by the Chinese people, he said this is re-balancing growth.
"As we in the US save, invest, and export more, China and other countries are moving to expand consumption and imports. This transition in China will expand what is already an important market for American exports," Geithner said adding that this is encouraging.
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