U.S. firms worry over business chill in China

57 percent of U.S. IT firms in China expect new rules for government purchases will hurt their business in the fast-growing Chinese market.

New rules requiring government agencies to purchase goods from "indigenous" companies is having a chilling effect on sales. Anything that restricts or reduces access to Chinese customers will restrict or reduce interest in investing or doing business here.

One-third of the 203 companies surveyed by the American Chamber of Commerce have seen their China sales slide as confusion grows over the new directive for China's government agencies to purchase goods from Chinese companies.

Washington is accusing Beijing that it is manipulating its currency, causing it to be undervalued to help boost exports. Commerce Minister Chen Deming said that such allegations were irrational.

Chinese Premier Wen Jiabao said China would resist calls to appreciate the yuan and keep its currency "basically stable” because increasing the value of the yuan could lead the world to a "double-dip" recession. He also urged the United States and the European Union to lift restrictions on exports of certain technology to China.

A political fight between Washington and Beijing would of course impact interest in doing business in China. I think the governement should be careful with these new rules to prevent a collapse of the turnover of all the involved companies. These mesures can have great consequences when taken without care for the economic stability.

Tom Bogaert

Source : http://www.cnn.com/2010/BUSINESS/03/22/china.amchan.survey/index.html