Once upon a time, the American business community in China wanted no beef with Beijing, but as China refuses to make good on its promise to open up its markets, a growing number of foreign business leaders are being drawn toward ‘reciprocity’. Graham Mackay reports.
The new buzzword in the U.S. business community in China - 'reciprocity'. Some industry leaders say they'd welcome a tougher stance on business - letting foreigners buy up Chinese assets in the same way Chinese firms can invest in the West. It's a major shift from a community that once wanted no confrontation with Chinese lawmakers. Reuters' Michael Martina has been speaking to American industry leaders in Beijing. "There's no question really why China, for the size of its economy, has comparatively high market restrictions. Business leaders here complain that more than 15 years on from China's WTO session, and despite official's repeated pledges for market reforms, China has not meaningfully increased market access,' he says. While Chinese firms have spent billions on U.S. assets like AMC Cinemas and the Waldorf Astoria, much of China's economy is off limits to foreigners. For those who want to address the balance, Donald Trump's new government could be the answer. The President is known for his no nonsense approach to Beijing and his pick for Commerce Secretary, Wilbur Ross, has backed reciprocity in the past. Even if the U.S. can't tell Beijing what to do on Chinese soil, it could still balance the scales by restricting Chinese investment in America. "Proponents of some form of reciprocity say that regulating Chinese investments would not be an abandonment of the free market, but merely an effort to address a market failure, much in the way the competition policy would regulate cartels," Martina says. For all its growing support, balancing U.S.-China investment clearly comes with risks attached. If Washington comes in too heavy handed, it could destabilizing relations with China, possibly sparking a business backlash against America.