Richard Brubaker, of the All Roads Lead to China blog, recently posited that perhaps all roads don’t lead to China.

His example cited a longtime Made-in-U.S.A. footwear company that was getting flak for outsourcing its manufacturing to China, and makes an excellent point that each move-operations-to-China decision should be carefully considered on an individual company basis rather than be the goal for every enterprise out there.

This theme of companies getting into trouble because they have moved operations to China is beginning to emerge more – note our article here. Beyond specific company or industry reasons not to come to China, there are still plenty of general reasons not be here either, poignantly outlined by the European Union Chamber of Commerce recently.

The chamber’s new position paper suggests some China problems are getting worse – or at least are as bad as ever.

The biggest problems revolve around the issues of transparency and intellectual property protection, according to a presentation on the paper by Joerg Wuttke, president of the European Chamber. He cited the European Chamber Business Confidence Survey 2007, which noted that “transparency is the highest on the list of major obstacles to doing business in China,” and intellectual property rights (IPR) protection is the second highest obstacle.

Transparency can be at its worst when it comes to administrative coordination.

Main concerns, according to Mr. Wuttke, include:

• The lack of independent regulators
• Restrictive business license applications
• The ineffective regulatory environment
• Duplicative regulations
• The absence of a leading agency for jointly issued legislation
• Ineffective coordination between central and local authorities
• Lack of transparency in the public bidding process
• Short advance notice in calls for comments and the implementation of new regulation
• Closed circulation of proposed legislation among selected companies

Meanwhile, the main IPR concerns include:

• The trademark office backlog getting worse
• IPR enforcement problems remaining in major ways
• The lack of legal protection for confidential information
• Systematic control over all types of technology being tightened

Understand that not all chambers of commerce in China have the same intelligence (in the sense of information). American Chamber of Commerce members seem to think that IPR is not one of the biggest China problems, as we noted here.

Meanwhile, there are positive developments both in the areas of transparency (like more frequent public calls for comments related to the draft Energy Law and draft Food Safety Law) and IPR protection (like the State Intellectual Property Office making a machine available that provides English translation for Chinese patents, and the increased use of courts for IPR dispute settlements).

Mr. Wuttke concluded that “protectionist pressures will emerge as expansion of trade and investment relations continues.”

So there are plenty of officials in China that may not want to help you – foreign devil – by making beneficial changes related to transparency and IPR.

In the end, unfortunately, whether or not there is light at the end of the tunnel for you may depend on whether your road leads to China or not.

    Channel: Vital News     |