Daily Times

Most US businesses operating in China oppose using tariffs as a weapon to solve their problems ranging from market access to poor protection of intellectual property rights, a survey suggested on Thursday.

Nearly 69 percent of the 434 respondents to the annual China Business Climate Survey of the American Chamber of Commerce in Shanghai opposed tariffs, while 8.5 percent backed them.

The survey, conducted April 10 to May 10, reflects the mix of concerns and realities for American businesses in China at a time of heightened uncertainty as the Trump administration raises the ante in its trade war with Beijing.

President Donald Trump accuses China of unfair trade practices that benefit its firms while hobbling US companies and creating an outsized trade deficit for the United States.

Washington raised the stakes in its trade war with China on Tuesday, proposing 10 percent tariffs on an extra $200 billion worth of Chinese imports, from food products to tobacco, chemicals, coal, steel and aluminum.

“One should give the Trump administration credit for getting China’s attention because for many years there have been extended discussions about market access issues that plague foreign companies here in China, and the progress has been pretty slow,” said Ken Jarrett, president of AmCham in Shanghai.

However, extrapolating from the survey findings, Jarrett said multilateral negotiations were a preferable approach.

“Now that the US government has China’s attention I think actually there’s no alternative but to try to go back to the negotiating table,” said the former US Consul General in Shanghai.

While US firms still face challenges in China, 34 percent of respondents felt state policies toward foreign firms had improved, up from 28 percent last year, the survey showed.

Those that felt policies had worsened for foreign firms fell to 23 percent from 33 percent last year. Sixty percent said the regulatory environment lacked transparency, on par with 2017.

Protection of intellectual property rights and licensing requirements were the top two regulatory challenges.

The Trump administration has complained that US companies are forced to hand over key technology to access China’s market.

Twenty-one percent of firms in the survey said they felt pressure to transfer technology, with aerospace and chemicals firms leading the way at 44 percent and 41 percent respectively.

China’s Cybersecurity Law, which took effect last year, had disrupted businesses, the survey said, while VPN policies made work harder for 56 percent of companies.

Published in Daily Times, July 13^th 2018.