WTO entry sweetens foreign investment in China

摘要

China is the sixth largest economy in the world and the only trillion dollar economy expected to double in the next decade. By citing figures such as these, it becomes obvious why Deloitte & Touche's George Koo, director of the Chinese Service Group, thinks that China is so attractive to foreign investors. The market potential is too enormous to ignore, Koo says. The country's foreign trade already exceeds Japan's (third to the EU and North America), and it has become the largest mobile phone market with only 14% penetration. What could slow down or sidetrack the country's plans for growth and US companies' desire to participate? Koo believes the biggest roadblock to China is Washington D.C. Obtaining export licenses for dual use equipment is particularly cumbersome. "The DOD, Department of State and the Department of Commerce all have a say, which severely hampers US companies' ability to sign contracts," states Koo. He also categorizes the limits as unreasonable. "If they were truly focused on critical pieces of equipment, it would be OK, but they're not," he says, adding that usually it's not the case that only US companies make the specific technology, so buyers will go elsewhere. He also believes that if the focus were only on equipment of importance to the military, it would be easier to enforce the provisions and track a limited number of items.