comscore China says it’s open for business, but foreign firms find difficulty | Honolulu Star-Advertiser

China says it’s open for business, but foreign firms find difficulty

GUANGZHOU, China >> The southern Chinese city of Guangzhou today welcomed dozens of corporate leaders and foreign dignitaries with one overriding message: China is open for business.

The reality on the ground was more complex.

China is increasingly presenting itself as a global force: President Xi Jinping surprised the world in January when he told power brokers gathered in Davos, Switzerland, that the country planned to intensify its role in the absence of American leadership.

That message was echoed at the Guangzhou conference, which was attended by the leaders of companies like Apple, Ford, Philips and Walmart and foreign leaders like Prime Minister Justin Trudeau of Canada.

“China’s door will not close to the world but open wider,” Xi said in a letter addressed to the gathering, which was organized by Fortune magazine. China’s president was to attend the conference until changing his plans at the last minute, according to local media reports. Wang Yang, China’s vice premier, spoke of the country’s commitment to a “nondiscriminatory environment for foreign companies.” Another senior Chinese official promised a level playing field for foreign businesses.

But the messages of openness contrasted sharply with actions taken in Beijing and elsewhere in the country. China wants its giant national companies to be world leaders in sectors like electric cars, robotics and drones, but authorities are accused of curtailing foreign firms’ access to Chinese consumers.

A government-led effort to help Chinese companies at home and abroad has set up a potential trade battle with the United States, as a growing number of U.S. businesses complain that Chinese trade practices like forced technology transfer are putting them at a disadvantage.

At the conference in Guangzhou, multiple officials promoted what they called the “spirit” of the ruling Communist Party’s recent congress, which tightened Xi’s grip on the state and gave his policies an exalted status in a sign of the role the party intends to play in China’s economy. The crowd in the cavernous ballroom at the Shangri-La Hotel thinned out as one official after another spoke over the course of an hour.

Surveys of China business leaders by the U.S. Chamber of Commerce in recent years have shown that many American companies do not think the playing field is even.

“Chinese government statements reaffirming China’s commitment to providing a nondiscriminatory environment for foreign companies are always welcome, but need to be accompanied by real progress,” said Kenneth Jarrett, the president of the U.S. Chamber of Commerce in Shanghai.

“The challenges of China’s regulatory environment — its opaqueness, unpredictability and basic problems of market access — make it difficult for U.S. companies to realize their full potential,” he added.

Others were more blunt in their assessments.

“You can get WeChat in America, but you can’t get Facebook here in China,” Terry Branstad, the U.S. ambassador to China said today, referring to the popular Chinese social media app that is used by nearly 1 billion people. Facebook, by contrast, is blocked in China, although the company is still trying to get into the country.

“We are hopeful that we can still continue to make progress, but there are still basic areas of concern,” Branstad added, referring to the growing frustration that China is demanding too many concessions from companies that want to compete in the country.

One company that has sought to make concessions in hopes of maintaining its access to the Chinese market is Apple. The company has been criticized for recently removing some apps from its China app store, including those meant to help users circumvent the country’s heavily censored internet. The company’s chief executive, Tim Cook, expressed respect for China’s rule of law at the conference Wednesday.

“When you go into a country and participate in the market, you are subject to the laws and regulation of that country,” Cook said, underscoring the notion that some U.S. business leaders are willing to play by China’s rules. “You don’t bring the laws and regulations that you wish were there,” he added.

Cook had come to Guangzhou from the World Internet Conference, which was organized by the Cyberspace Administration of China. His attendance at that event raised concerns that he was lending his support to the government’s heavy-handed control over the internet.

Cook, responding to those concerns, said, “My view is that you show up and you participate because nothing ever changes from the sidelines.” He also said he hoped that some of the apps the company had made unavailable in China would one day be available there again.

Against this backdrop, Chinese companies are beginning to claim some of the dominant positions that their foreign counterparts once had around the world. One of the many statistics that officials here cited to support China’s growing strength on the global stage was this one: The Fortune 500 list now includes 115 Chinese companies, nearly equal to the number of U.S. companies.

One thing is clear: The days when foreign companies thought they could come to China and make a quick profit are over.

“You cannot just be in the market to make money,” said Hans Tung, a managing partner at venture capital firm GGV Capital. “I think that if you can help the Chinese government to achieve its objective of being a model of growth, you’ll have achieved your own objective as well.”

Not everyone every business leader here was quite as diplomatic.

“People complain too much,” said Jack Ma, the founder of the e-commerce giant Alibaba. Ma’s company plays a dominant role in the lives of most Chinese consumers, and it has become a darling of U.S. investors and almost as valuable as Amazon.

“If you cannot survive in China, I barely think you can survive in other countries,” Ma added, citing the success in China of U.S. companies like IBM, Starbucks and Walmart.

His advice for foreign companies was simple: “Have patience and respect the rule of law.”

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