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By: Clif_Droke
Last Wednesday the lead headline in the Wall Street Journal stated, “Business Sours on China.” It seems, according to WSJ, that Beijing is “reassessing China’s long-standing emphasis on opening its economy to foreign business….and tilting toward promoting dominant state companies.” Then there is Internet search giant Google’s threat to pull out of China over concerns of censorship of its Internet search results in that country.
The trouble started a few weeks ago Google announced that it no longer supports China’s censoring of searches that take place on the Google platform. China has defended its extensive censorship after Google threatened to withdraw from the country.
Additionally, the Obama Administration announced that it backs Google’s decision to protest China’s censorship efforts. In a Reuters report, Obama responded to a question as to whether the issue would cloud U.S.-China relations by saying that the human rights would not be “carved out” for certain countries. This marks at least the second time this year that the White House has taken a stand against China (the first conflict occurring over tire imports).
Adding yet further fuel to the controversy, the U.S. Treasury Department is expected to issue a report in April that may formally label China as a “currency manipulator,” according to the latest issue of Barron’s. This would do nothing to ease tensions between the two nations and would probably lead one step closer to a trade war between China and the U.S.
Then there was last week’s Wall Street Journal report concerning authorities in a wealthy province near Shanghai criticizing the quality of luxury clothing brands from the West, including Hermes, Tommy Hilfiger and Versace. This represents quite a change from years past when the long-standing complaint from the U.S. over the inferior quality of Chinese made merchandise.
On Monday the WSJ ran an article under the headline, “American Firms Feel Shut Out In China.” The paper observed that so far there’s little evidence that American companies are pulling out of China but adds a growing number of multinational firms are “starting to rethink their strategy.” According to a poll conducted by the American Chamber of Commerce in China, 38% of U.S. companies reported feeling unwelcome in China compared to 26% in 2009 and 23% in 2008.
As if to add insult to injury, the high profile trial of four Rio Tinto executives in China is another example of the tables being turned on the West. The executives are by Chinese authorities of stealing trade secrets and taking bribes. There’s a touch of irony to this charge considering that much of China’s technology was stolen from Western manufacturing firms which set up shop in that country.
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