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Updated Friday, May 6, 2011 8:51 pm TWN, By Shaun Tandon, AFP

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China more closed to business: US

WASHINGTON -- U.S. Commerce Secretary Gary Locke said Wednesday it was increasingly difficult to do business in China and called restrictions on foreign investment a major impediment to relations.

Locke, the nominee to be the next ambassador to Beijing, said the U.S. government and companies had “real frustrations” that would be raised during high-level talks between the world's two largest economies next week.

Speaking at the launch of a think-tank report that supported further Chinese investment, Locke said Washington imposed few barriers on Chinese companies seeking to enter the United States.

“Unfortunately, that is not the case for American companies operating in China, where they are frequently shut out of entire industries or they are forced to give up proprietary information as a condition of operating in China,” he said.

“This imbalance of opportunity is a major barrier to continued improvement of the United States and China's commercial relationship.

“And it is part of a broader trend of China recently narrowing its commercial environment after a long and fruitful period of opening,” he told the event attended by China's ambassador to Washington, Zhang Yesui.

Locke said that China's recently revised Foreign Investment Catalogue, which lists sectors in which outside firms are barred from participation, “falls far short” of past promises to the United States for more openness.

He strongly criticized a new system in which commercial competitors would be able to ask the Chinese government to review a particular item of foreign direct investment (FDI).

“I am aware of no other country which allows this potentially abusive element in their FDI reviews,” Locke said.

The United States and China on Monday and Tuesday hold their annual Strategic and Economic Dialogue, with the U.S. side led by Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton.

Geithner said this week he would press China on reforms in the financial sector, saying that controls on bank deposits and loan rates were designed to give an advantage to state-owned companies.

While Locke said that the United States was open to Chinese businesses, a number of high-profile Chinese bids have proven controversial after lawmakers voiced fears over national security.

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