U.S. Commerce Secretary 'Very Concerned' about China Policy

Beijing's policies in favor of local innovation and technology could give domestic firms a "leg up" over foreign rivals in clean energy market.

Commerce Secretary Gary Locke said on May 17 he was "very concerned" about Chinese policies that could limit foreign firms' access to the country's ballooning clean energy market. Kicking off his first trade mission to China, Locke said Beijing's policies in favor of local innovation and technology could give domestic firms a "leg up" over foreign rivals and pledged to raise the issue with Chinese officials.

"We're very concerned about that," Locke said. He also said that the policy was "made without any input from affected businesses and really not subject to any public comment."

The issue comes ahead of key Sino-U.S. talks scheduled for next week in Beijing, to be attended by U.S. Secretary of State Hillary Clinton, U.S. Treasury Secretary Timothy Geithner, Locke and other key officials.

Locke said Beijing had made some changes to its innovation policies but added that despite laws guaranteeing foreign firms access to the Chinese market "implementation is often inconsistent at the provincial and local level."

"This is especially true when it comes to intellectual property protection," he explained. "As China moves up the economic value chain from low-cost manufacturing to higher value-added research and development, they too will count on protections for their innovations and free access to other markets."

One directive issued by China -- and cited in the past by Washington as a problem -- stipulates that high-tech goods must contain Chinese intellectual property in order to be included in a Chinese government procurement catalogue. Accredited products would be favored, according to the policy, which foreign firms say effectively excludes them from the process.

In a sweeping speech on clean energy, Locke played down "inevitable" trade spats between the two countries, saying less than three percent of Chinese exports to the U.S. were slapped with antidumping duties last year. "The disagreements we have are an inevitable byproduct of the growing and mature trade relationship between our two countries," Locke said.

The U.S. and China could work together on environmental technologies "to help lead the world away from the brink of environmental disaster," Locke said.

China invested $34.6 billion in clean energy in 2009, up more than 50% on the previous year -- making it the world's biggest investor in energy-efficient technology, according to a UN report published this month.

Copyright Agence France-Presse, 2010

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