According to the Tuesday September 14, 2010 Wall Street Journal “Wen Reassures Foreign Firms” , Chinese Premier Wen Jiabao pledged “that foreign businesses in China will be treated fairly” and acknowledged that certain Chinese policies related to areas such as innovation, economic development, foreign investment and international trade and competitiveness were “unclear.”
According to the article, the Premier stated the current situation “is not all due to misunderstanding by foreign companies. It’s also because our policies were not clear enough.”
Premier Wen’s also restated China’s commitment to an open and fair trade and investment environment stating: “China is committed to creating an open and fair environment for foreign-invested enterprises.”
Reportedly, these comments are unusual because they apparently reflect concern within China’s leadership while also acknowledging China’s role in the increasing hesitation and debate about the costs versus benefits for foreign company investment in China.
So, will this be the beginning of the end of an area when “some Western firms enter into [joint ventures] to gain access to local manufacturing capacity and contacts, and find they need to share technology as part of the deal.” (WSJ, In China, Western Firms Keep Secrets Close, August 30, 2010)
According to another recent Wall Street Journal:
“… each [foreign investment] deal will require approvals from Chinese authorities who have a reputation for pressuring foreign investors to introduce their latest proprietary technology, but a weak track record for protecting it.” (WSJ, In Toledo, the ‘Glass City,’ New Label: Made in China, August 30, 2010)
If the Premier’s remarks symbolize an end to China’s often questioned policies of technology transfer in return for the opportunity to access the market, what will follow? How will any written or un-written policies be changed or revised to promote a free and fair environment while still protecting China’s domestic, economic, national and international interests?
Authored by: Gabriel M Key