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Is China already removing its 'braces' before it can walk? Just my thoughts...

BEIJING - A growing number of foreign businesses in China feel shut out under new government policies promoting homegrown technology, according a survey released yesterday.

Feeling increasingly unwelcomed to participate and compete in the Chinese market was 38 per cent of foreign firms questioned by the American Chamber of Commerce. That marks a 12 percentage-point rise from the last survey taken just a few months before. Over that period, the government has increasingly steered business toward state-owned companies, ostensibly as part of efforts to boost innovation among Chinese firms.

The chamber's data, gathered earlier this year from 203 companies, portrays a steadily worsening environment for foreign companies in China over the past three years. The disquiet was most pronounced among foreign firms specialising in high-tech and information technology, with 57 per cent saying they felt negatively affected by government policies. In that sector, 37 per cent of foreign companies said they were losing sales as a result of Chinese government policies. Such sentiment has increased following the government's launch of a 4 trillion yuan ($820 billion) stimulus package in late 2008 designed to help China rebound quickly from the global crisis.

Foreign direct investment in China rose at its slowest rate in seven months in February, up 1.1 per cent from a year earlier.

The chamber's report comes amid a dispute over China's currency controls. Some United States lawmakers have demanded to have China declared a currency manipulator by the Treasury Department, possibly mandating trade sanctions. AP

From, Tuesday, 23-Mar-2010

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