WASHINGTON – A U.S. business group voiced concern Monday over market access barriers in China, which it said likely contributed to a drop in foreign investment there last year.
The U.S.-China Business Council’s president, John Frisbie, said that in a recent survey of its 230 member companies, nearly 10 percent of respondents reported that they had stopped or delayed a planned investment in China because of foreign ownership restrictions.
China, the world’s second-largest economy, is recovering from its own downturn. It reported last month that its foreign investment inflows from all sources fell 4 percent in 2012 compared with 2011.
I think the decline in foreign direct investment that China saw last year in part reflects the investment barriers, Frisbie said in a briefing to journalists after a visit to China. He added that those obstacles were a more predominant reason than the uncertain global economic environment for U.S. businesses withholding investment.
According to China’s official investment catalog, there are ownership restrictions in nearly 100 sectors, including financial services, agriculture, cloud computing, health insurance and hospitals, refining and petrochemicals and energy-intensive industries.
Frisbie said this was moving higher up the scale of concern for the council, which was formed 40 years ago to advocate for American companies working in China. It estimates the country is a $250 billion market for the U.S. that will only grow as China’s middle class expands in the coming decade.
The survey, published in October, garnered responses from executives in both the United States and China and represents the views of the council’s members. It included companies involved in manufacturing, services and primary industries such as agriculture and oil and gas.
Despite the overall drop in foreign investment into China last year, that from American companies still actually rose slightly, Frisbie said, although it was less than half the amount of Chinese direct investment into the U.S., which hit record levels.
The council advocates stronger ties between the U.S. and China.