S&ED

VOA special report

WaPo editorial: U.S. must push back against China's investment controls
FT Lex: 中國向大型國企提供廉價信貸

But as U.S. and European companies describe it, Beijing has increasingly used government procurement rules, technical standards and tax laws to force foreign companies to transfer their technology to state-owned Chinese firms in return for access to the Chinese market.

This is bad for U.S. companies and their workers, since, despite worries about 「outsourcing,」 U.S. subsidiaries abroad often create demand for inputs made back home. It's bad for China's workers, too, since it deters job-creating investment. But Beijing's objective is the mercantilist one of building up state-owned 「national champion」 firms that can then capture global markets from Japanese, European and U.S. competitors. No matter that the state-owned sector already receives massive official support, direct and indirect — while more efficient private-sector job- creators must scramble for resources.

Many U.S. companies say that China's push for 「indigenous innovation」 represents the biggest step back toward protectionism since its market reforms began in 1979. When added to China's improving but still inadequate enforcement of broader intellectual property rules, the policy calls into question commitments China made to open its markets when it joined the World Trade Organization in 2001.