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NFTC Submission for JCCT
Date: 6/28/2010

Trade and Investment Workng Group
  •  NFTC member companies are broadly concerned about increasingly protectionist trends in China’s industrial policy with specific reference to intellectual property protection, taxation, government procurement and technology transfer policies.

  • Companies are especially concerned about the ultimate implementation of China’s indigenous innovation program and the scope of subsidies and domestic preferences for procurement by governmental bodies and state-owned enterprises. Many of these preferences prohibit companies with less than 51% Chinese ownership from eligibility for procurement. A key issue therefore is the definition of a Chinese company for eligibility. Companies would like to see the NIIP shaped to be more market-based and equitable, permitting all products made in China to be eligible, irrespective of the national ownership of companies. Since the final shape of the indigenous innovation program remains a work in progress, U.S. government advocacy toward those objectives is strongly desired.

  • Restrictions on and requirements for joint ventures continue to pose a barrier and since joint ventures are a principle vehicle for market entry, these restrictions have a protectionist impact.

  • Protection of intellectual property rights continues to be a concern for many sectors, especially in information technology. Since intellectual property is at the heart of innovation, the U.S. government has a key role to play in persuading China that its domestic innovation requires adherence to international standards of IP protection.

  • NFTC member companies are especially concerned about China’s domestic preferences in clean energy technology. For example, a March 2010 NFTC study found that the foreign share of new purchases of wind power equipment has fallen sharply in the past three years and foreign suppliers are effectively excluded from Chinese procurement of solar power in the photovoltaic industry, as well as power generation from biomass. Given the magnitude of Chinese investment in clean energy technology, U.S. government advocacy to open this Chinese market is crucially important.
Information Industry Working Group
  • Chinese licensing policies are a continuing hurdle. China should be encouraged toward a technologically neutral approach for licensing telecommunications operators to continuously upgrade their networks without new licensing requirements.