China's drive to develop homegrown technology was "anti-foreign and regressive" and would continue to fuel trade disputes with Washington, the U.S. Chamber of Commerce said on July 28. The report said China was abusing the allure of its vast market to push foreign companies to transfer their latest technologies to Chinese competitors.
This was a "blueprint for technology theft on a scale the world has never seen before," it said.
The report is the latest in a growing chorus of complaints by foreign businesses and governments over perceived unfair policies and market restrictions in the world's third-largest economy.
"Indigenous innovation is a massive and complicated plan to turn the Chinese economy into a technology powerhouse by 2020 and a global leader by 2050," said the U.S. Chamber of Commerce, one of the biggest business groups in the world.
"What is worrisome for the business community is that these indigenous innovation industrial policies are headed towards triggering contentious trade disputes and inflamed political rhetoric on both sides."
China launched its indigenous innovation campaign in 2006 to encourage the development of domestic technology, and thereby reduce its reliance on foreign know-how, to boost economic growth and national security.
Tensions over it flared after Beijing issued rules late last year that were widely seen by foreign businesses as squeezing them out of the government's multi-billion dollar procurement market.
Concerns over indigenous innovation extended to security encryption rules, domestic patent laws and preferential policies for domestic companies, the U.S. Chamber of Commerce report said.
Amid rising foreign criticism, Beijing has strongly defended its policies.
Visiting German Chancellor Angela Merkel earlier this month prodded China to provide a more level playing field for German businesses here. But in a meeting with German business leaders accompanying Merkel, Premier Wen Jiabao rejected suggestions that foreign businesses were being put at a disadvantage.
The requirements for technology transfer were "forcing foreign technology companies to anguish over balancing today's profits with tomorrow's survival".
"The belief by foreign companies that large financial investments, the sharing of expertise and significant technology transfers would lead to an ever-opening China market is being replaced by boardroom banter that win-win in China means China wins twice," the report said.
Copyright Agence France-Presse, 2010