By Laurie Burkitt
BEIJING-U.S. businesses are pushing Chinese authorities to
improve legal transparency, market access and intellectual-property
rights across industries from technology to pharmaceuticals after
foreign companies faced a spate of new regulatory hurdles in the
country recently.
The American Chamber of Commerce in China is urging Chinese
leaders to improve working conditions for information and
communications technology, ensuring rule of law and creating
transparency in "cross-border flows of digital data and
technology," the industry group said in its annual white paper
Tuesday. Lawmakers should consult the technology industry before
developing new policies and regulations, said the group, which
represents 1,000 member businesses in China.
To boost conditions for health-care and pharmaceutical
businesses, the American Chamber is pushing officials to issue
unified standards, create consistent enforcement in the industry
and to establish comprehensive intellectual-property
protection.
Other sectors, such as agriculture, automotive, media and
entertainment face market barriers and unfair restrictions, the
industry group said. The financial-services sector faces investment
caps and the cosmetic and health-care industries face arbitrary
inspections with unjustified fines, the group said.
Many of the chamber's suggestions for policy makers are
long-standing positions. The latest pleas to improve standards and
legal transparency come as regulatory challenges have picked up.
U.S., European and Japanese businesses have been fighting new
bank-technology rules that would require them to turn over
proprietary-software source codes and encryption keys and submit to
intense testing. Chinese leaders suspended plans to implement the
rules, but the chamber cautioned that suspension doesn't mean
companies are in the clear.
"These were suspended but that doesn't mean it's over yet," said
James Zimmerman, AmCham China Chairman.
"It's not something that we feel is completely resolved," Mr.
Zimmerman said.
The group is concerned about transparency in the negotiation of
the banking rules, stating that the dispute wouldn't have escalated
to the levels that it did--sparking fear in tech groups and
involving top national regulators--had the policy-making process
been more opaque.
Mr. Zimmerman said the group is also advocating for clearer
investigation procedures. Last year, more than 30 foreign
companies, including chip maker Qualcomm Inc., came under scrutiny
from China's antitrust regulators. Qualcomm said it would pay a
$975 million antitrust fine. International business lobbies
complained about the Chinese investigations, stating that they
lacked transparency. Regulators have said that their practices were
in accordance with Chinese law and that they don't unfairly
scrutinize foreign companies.
In its annual survey of around 500 member companies published in
February, the American Chamber said 83% of businesses reported
negative effects from Internet censorship. Internet slowness and
reduced access to information as a result of censorship were among
the complaints, the chamber said in its report.
In the pharmaceutical sector, the chamber's white paper zeroed
in on greater market access for medical devices and smoother
registration approvals. Some companies, such as Eili Lily & Co.
and Johnson & Johnson, have complained of slow regulatory
approval.
Antitrust lawyers say pharmaceutical companies are pushing for
more evenly enforced standards for foreign and domestic companies.
Drug companies have been under a microscope for years in China,
with authorities announcing in 2013 plans to investigate French
drug maker Sanofi SA and regulators visiting a Novo Nordisk A/S
production facility. Sanofi has declined to comment on
investigations and Novo Nordisk said at the time that it wasn't
accused of wrongdoing.
Last year, China fined GlaxoSmithKline nearly $500 million for
bribery and corruption in China. A Glaxo spokesman said last year
that five of the company's managers, including its former top China
executive, were convicted of bribery-related charges and received
suspended prison sentences. Glaxo said the activities of the
managers were "wholly contrary to the values and standards"
expected of Glaxo employees.
European trade groups are also urging for better working
conditions for their companies in China. The European Union Chamber
of Commerce in China has pushed China to improve transparency in
its antimonopoly regulation and investigations. Earlier this month,
the group pressed the city of Beijing on issues from the
streamlining of taxes to the cleaning up of air pollution.
Write to Laurie Burkitt at laurie.burkitt@wsj.com
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