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EU Companies Worried About 'Buy China' Policy
By Gillian Wong, Associated Press Writer
Manufacturing.Net - March 17, 2010

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BEIJING (AP) -- The European Union added to pressure on China over its plan to favor domestic technology in government purchasing, saying Wednesday it wants assurance the policy will not be used to exclude foreign suppliers.

The Chinese government says the policy is meant to spur domestic innovation but foreign companies have expressed alarm they will be shut out of the government's multibillion-dollar annual purchases of computers and other goods. The United States and foreign chambers of commerce have criticized the plan.

European companies worry the strategy is unfairly blocking market access, said Serge Abou, the ambassador to Beijing for the 27-nation EU. Abou said he wrote to Commerce Minister Chen Deming seeking an explanation in December but has not received a response.

"Reassure us fully that this will not be used as a way to differentiate foreigners from the Chinese," Abou said at a news conference. "We ask for a total absence of discrimination."

The complaint comes ahead of an April 29 visit to Beijing by a team led by European Commission President Jose Manuel Barroso. Abou said Barroso is expected to meet with Chinese Premier Wen Jiabao, the country's top economic official.

The Chinese procurement plan says the government will favor products based on domestically developed technology. Foreign companies can apply to be treated as domestic suppliers, but business groups say conditions are so strict that even those with research and development facilities in China are unlikely to qualify.

The plan is part of a sweeping government effort to promote "indigenous innovation." It reflects Beijing's growing assertiveness as it tries to make Chinese industry more autonomous after depending on foreign money, markets and technology for three decades to drive its economic boom.

Trade groups say it violates the spirit of China's World Trade Organization free-trade commitments and its pledges to avoid protectionism that might harm the global recovery.

Abou said European companies in China should be allowed to participate fully in public tenders just as Chinese companies are allowed to participate in public tenders in Europe.

"If they give a preference to what they call Chinese indigenous technology, I consider that technology developed in China by Philips or Siemens or Alcatel, or what have you, must be considered equally in China, because they are invested in China," he said.

Abou also criticized the "China Compulsory Certification," an inspection process for industrial and technology standards that business groups say appears to be meant to favor Chinese companies. He said companies that want to export products to China sometimes face delays of years in obtaining certification.

"This system is more and more complex and it is the main obstacle to imports in China and I don't hesitate to qualify it as protectionist," Abou said. "We are more and more worried because the mood seems to be not to simplify these procedures which are very cumbersome but to make them even more complex."


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what a surprise - not  3/17/2010 11:39:00 AM
liberals accelerated the technology transfer to other countries - "it will grow our sales in those countries". Never considering that these countries would start building and selling their own.
The Chinese Primary Interest Is China  3/17/2010 11:48:00 AM
Anybody that thinks China won't act in their own best interest is a fool! Why would you even ask that China play fair. Trust the actions and not the rhetoric! Totally jettison the WTO and let sovereign nations make trade deals with one another as they see fit. Does anybody remotely believe this new 'world order' nonsense is working out for anybody other than China, and maybe India?!
Give China credit  3/17/2010 11:54:00 AM
One thing you can say about China. They look out for their own when it comes to protecting their domestic markets and manufacturing base and dont eat their young. Perhaps the US chamber should sit up and take notice.
Is that rain?  3/17/2010 11:58:00 AM
No, it is tears from the EU crybabies! They are so afraid that somebody else will favor domestic products over their own. First it was USA Military aircraft purchases, and now they want China to buy their stuff instead of using domestic. There are very few cases in which I agree with anything Bejing does, but this is one of those cases. Their government is doing what ours should...favoring domestic suppliers over others! We need to follow that advice government-wide, regardless of anything else. Too costly, you say? Not when you consider the REAL costs of buying from other countries, namely exporting jobs! If we were to quit sending money by the shovel full to countries that hate us, the cost difference would probably balance out, as would our foreign trade defecit.
Buy China  3/17/2010 12:14:00 PM
I don't call common sense Protectionism. If we Americans followed this line of thinking maybe the 17 million unemployed would be working and we wouldn't be in the mess we are in.
Cause = make this quarter's numbers=bonus  3/17/2010 12:18:00 PM
"News" is whatever will sell advertising space, not what we need to know. "Government" is talking points and the next election. China leadership is strategic, if they do not keep the local strongmen in line they country will rip itself apart as happens with the USSR. The west needs true information from government and news, and strategic leadership. Agreed? How do we move in this direction?
Question....  3/17/2010 12:32:00 PM
Are we talking about Communist China ?
Stop griping at China  3/17/2010 12:54:00 PM
So China favors domestic industry and multinationals are kept waiting at the gate. This is nothing new. The US economy was entirely domestic all through the middle of the 20th century. Stuff was made in the US and sold there. It's a large country so there we're plenty of people to sell to. Henry Ford wasn't whining that he couldn't sell in Europe. This is what the Chinese want. With a billion people they reckon they should be able to make everything themselves. It's their choice. However other countries should be able to block Chinese imports as they see fit. Economists will hate this because free trade would be better all round. Businesses hate this because, well, some trade opportunities are better than none. However lopsided trade does not favor US or European national interests, and so we should be as selective as the Chinese. It's a war of sorts, and it's going to be a long one.
So 'liberals' accelerated tech transfer abroad.....  3/17/2010 1:02:00 PM
They did!? So the GOP has never been the Party of Big Business. Only unions have been against job exports. Sorry Mr Friedman (for the 'job exports'). I'll make it up somehow.)
USA Should Learn From China  3/17/2010 1:06:00 PM
I echo many of the commments re: my understanding and accepting this policy by the Chinese government. I only wish the US would do the same. Maybe then we could actually pay for all the health care benefits that so many think is a "right", regardless of whether the money is there or not. We'll all be sharing the same lack of healthcare if we don't start bringing mfg jobs back to America. No national wealth = no national health care, simple concept.
What a suprise -- it's all the liberals fault!  3/17/2010 1:35:00 PM
Liberals are respposible for this? I guess it's all Obama's fault too! The ignorance of some just amazes me.
Re: Is that rain?  3/17/2010 1:37:00 PM
Sir - madam, are you living on this Earth I walk? Protectionism in the US ... hhhm what about your Govermental bonds - all owned by foreigners, then your import surplus - what US companies can nowadays procure what you do not produce...? "Money by the shovel " so far US Finance companies suck money out of other countries, the US only supports what benefits their own business! So get real the US needs the rest of the wolrd, if not only for making wars real in other countries ...
I agree...the USA should learn from China!!!  3/17/2010 1:58:00 PM
I see no problem with China's desire to by Chinese. All countries (except for the USA) promote this. We need to aggressively promote “Buy USA” here in the US. We need to bring manufacturing back to the USA, use Lean practices, and buy our own stuff (instead of the crap that China continues to put out). Obama said that he would give big businesses incentives to bring manufacturing back to the USA. What an empty promise. Look at it this way…if the Chinese only buy computers from China, they will have problems because the quality is poor (Again…I see no problem here).
Surprised?  3/17/2010 2:22:00 PM
Why is EU surprised? U.S. government have similiar policy. In fact, Obama just confirmed "buy American" policy with most of the American "government" purchases. There is nothing wrong with a government requiring all products and services are "produced" in that country.
let them keep their junk!   3/17/2010 2:26:00 PM
I agree with "Stop Griping at China". American goods used to be highly valued by the rest of the world. We've lost our advantage by offshoring our manufacturing. The U.S. is infamous for trade negotations that do little for us and a lot for foreign markets. This is one war we cannot afford to lose.
EU worried about buy China Policy  3/17/2010 2:40:00 PM
Wanting to be self sufficient is an admirable goal for any country to pursue. If they don't develop their own technology they would be enslaved for ever. The western countries need to wake up from the fool's Paradise. Trade should always be in the interest of the nation.
Yankee Ingenuity  3/17/2010 3:11:00 PM
We use to have that…Take that also. You bet ya.. China wants and will have it all and guess what- They have a 10 20 50 100 and 200 year plan. This SELL out Baby Boomer population of ours, is only worried about the bottom line next quarter PERIOD. If seen it and I’m appalled. Go ahead keep shopping at Wal-Mart while the Communist plan for American Gluttony takes full hold of the tiered hoodwinked brain dead consumer. Look around how many more pizza places and lawn service jobs do we need. Wake up America and Support manufacturing here, Domestically, before the “X” generation forgets how all together. Hey here is an idea Hire someone with a family here.
RE:Yankee Ingenuity   3/17/2010 3:49:00 PM
Sir, you hit the nail on the head. Moving production to China is nothing more than simple corporate greed, specificly, executive greed. Those huge bonuses and incentives have turned upper management types in to financial Benedict Arnolds. All under the guise of remaining competitive."Don't worry you will be re-trained into a high paying service job". Well, where is this high paying job? I saw this comming more than ten years ago, corporations drunk on cheap labor and a "Me" attitude. As far as I am concerned this was nothing less than economic treason.
Stop the notion that Democrats are to blame!  3/17/2010 4:37:00 PM
Remember, that democrats always looked for the best for the average worker. The stock markets and CEOs have always supported the republicans to do things in their favor i.e., reduce costs by exporting jobs! Why don't you guys understand! It's a no brainer! THINK!!! Republicans in the name of protecting the republic are doing the real damage to this country from inside.
think and research  3/17/2010 5:48:00 PM
Some of the comments here are not political. Kudos to the thinkers. Many here are people who are programmed by political personalities. Tax credit for overseas business investment is a product of the Reagan Administration. Clinton business policy was in part based in Bush I policy (free trade). While you point fingers the wealthiest domestic and foreign corporations will have their way and dilute the strength of you and your children's futures. Learn to type after you learn to think?
This is really not a Democrat or Republican Problem!  3/17/2010 10:30:00 PM
It is an American problem...at least for the USA it is an American problem. Let's all stop trying to pin blame on one political party or individual, as this didn't happen over night. The "free trade" mantra has been around for many more than just the last 17 or 18 years. And yes, we NEED to rebuild our manufacturing base, do it well and do it very soon. How, some may ask did we get to the point of outsourcing consumer products to China? This is the result over the past 20 years of dealing with Wal Mart, Home Depot and others, but to a smaller extent. Wal Mart wanted constantly lower and lower prices, literally forcing companies used to WM's way of doing business, and wanting to keep it, to keep cutting corners! You can only take so much cost out of a product and still make it. So, you outsource. Wal Mart always pays their bills VERY quickly, and if you play their game by their rules, they buy massive amounts of product. For some items a few years ago, they actually asked manufacturers to furnish them with exact amounts of various metals and plastics, or whatever materials you used in your product. By this, they thought they could determine exactly what your basis in the product was, then go after it in the way of lower costs to them! Our problem here, as pointed out above is that we can't make some of the things we need here any more. OK, this is a problem that can be solved, as it once was. The whole mess will require us to do a lot of belt tightening (kind of like the millions of laid off workers have been doing!)and we'll all have to work together on it, including the Gen X and Gen Y members, who really can't see actually working and think everything should come to them through other channels. No, I don't mean all of those, just the vociferous ones. We can't go on like this folks! Buying every possible thing purchased by taxes from domestic sources is not protectionisim, it is a practical step toward survival, no matter what country is doing it!
Re: Stop the notion that Democrats are to blame!  3/17/2010 10:50:00 PM
Oh boy, it's 'blame the Republicans [Bush]' time yet again. During the entire Bush administration, people like you never ceased blaming everything on him. Let's see; under Clinton's final years in office the U.S. account deficit (broadest measure of trade competitiveness) shot up fivefold from $84 billion to $415 billion. When adjusted for inflation under the Bush administration, America's debt didn't budge at all. The obama administration, and the democrat-controlled Congress have depreciated the American dollar, doubled the national debt and quadrupled deficit spending. In just the first few months of this current administration, democrats have managed to spend (read squander) more money than all previous administrations (that's 234 years folks) COMBINED. Furthermore, democrats want to take over healthcare (18% of the U.S. GDP) and they are attempting every dishonest and deceitful tactic (reconciliation and even deeming it) in order to accomplish this. If the federal government manages to take over healthcare, we can all kiss good quality healthcare and any hope of economic recovery goodbye. Thanks democrats!
Advantages  3/18/2010 11:24:00 AM
The Europeans have been doing the exact same thing for years. CE certification, every type of regulation, standards setting, etcetera to exclude other nations products from their precious markets. Now China wants to encourage innovation and set tough certifications. They are simply learning the ropes from the Europeans. Face it. Every nation has its share of problems and advantages. The Europeans are best at vacationing and leisure, the Chinese, Koreans, and Japanese at best at excessive work and generating pollution, the Middle East has the oil, the North Americans are best at entertainment, financial subterfuge and drug use, the South Americans at delivering the drugs and the Africans at mining for precious metals and stones. Now, everybody go trade and make your best deals.


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