Foreign companies in China are often discriminated in tenders where “genuine” Chinese companies are either exclusively invited or favored through all kind of tricks. Those are issues monitored by the European Chamber, through the Working Group I chair.
When authorities – often due to pressure from the central government – want to have only “real” Chinese companies, tenders are quickly announced on an obscure website or newspaper and if “foreign suppliers” show up they are told not to bother to bid as they will not be considered. Even if they do, the tender evaluation process can be easily manipulated.
Of course, difficult to prove as there is no trace on paper and foreign companies are warned not to protest unless they want to be blacklisted forever.
Now, the important point is that Wholly Owned Foreign Enterprises and Joint Ventures:
– are legally CHINESE entities;
– manufacture in most cases their products with a major local content (e.g. over 70%) – the case of wind power turbines;
– the foreign JV, in critical sectors, are minority owned by foreigners;
– have transferred their technologies at least in part to China;
– employ local workers (few expats) and pay their taxes (unlike the Chinese companies).
But the Chinese look “who is behind’ – if foreigners, forget it.
In the USA, States defend Japanese car companies as they provide local employment and are as American as Ford. Forget about that in China.
Recently the central government (e.g. NDRC) has strongly reacted to comments from the European Chamber that European windmill manufacturers have been excluded from tenders and are losing nearly all projects. The authorities claim “their windmills are too expensive” – nonsense – the EU companies could not even submit a price.
Authorities also claim the poor “domestic enterprises are discriminated in favor of imports”. Other complete nonsense. The cases we fight for are not imports but are locally produced.
The attitude and comments from the Chinese government are blatant lies and nonsense. Just a few days ago:
“Chinese Premier Wen Jiabao says cooperation between China and Germany has been developing smoothly in a variety of fields. He makes the remark during a telephone conversation with German Chancellor Angela Merkel in which the two leaders also discuss bilateral ties and other issues of common concern. He says the two sides should continue to handle their relations from a strategic and long-term perspective and keep up high-level exchanges. He says China would never discriminate against foreign enterprises or products. (Source: http://finance.qq.com)”
As I say, is equal to the announcement that “in China the Internet is free”. As pathetic.
With the world economic crisis, China was the first to go around the world and preach “against trade barriers”, like against the “Buy America” initiative – one that is by far much less of a trade barrier than China is erecting SINCE LONG.
It should be noted that many of the “big contracts” foreign companies get here are often misleading. The companies actually source most of the content on the local market.
So, if Foreign Direct Investment is falling, let it fall. Why should foreigners transfer technology and invest in factories when they are later on excluded from the domestic market?
In the case of the wind turbines it is all too clear:
– Chinese manufacturers are still behind foreign ones despite all their blatant efforts to copy and re-engineer foreign technology;
– the wind power market is very big, so China regards this as strategic and local companies should take the major market share at all cost;
– never mind quality and total life cycle cost;
– when China regards something as “important”, there are no more laws, no fair trade, just daylight robbery of technology and market share;
– “foreigners” doing (too) well in China is unacceptable.
China has killed many industries in the West. Of course, blame here the MNC who make big money through sourcing so much in China, seduce the consumers and make them dependent on cheap goods. Not all is bad – it can be good for the consumer up to a certain point.
But with the world economy still in a bad shape (ask Warren Buffett), we can expect the USA and EU to stop swallowing it all from China. On the other hand, the West has not much leverage and has only itself to blame (first being the U.S. – financed by China).
Anyway, it could be a rough ride.
[disclaimer: Gilbert Van Kerckhove is chair of the Public Procurement Working Group of the EUCCC – views expressed here are his own]

Europe may have its share of problems – as Guy Verhofstadt told us the same evening – such as, a lack of unity, total inertia (in dealing with the current crisis). At least in Beijing we feel happy all together as a big Europe – joining the Europe Day party organized in the EU delegation, thanks to our sympathetic Ambassador Serge Abou.
I felt bad there – so much good-looking food from all the EU countries and I couldn’t touch it really because of my other dinner the same evening.

I did take a few pictures of – well yes – our Belgian Ambassador Bernard Pierre who again showed his singing talents (I have two of his CDs…). And of course (being me) of cute girls performing.
Sometimes Beijing sucks but we do have our rewards. Believe me.
So later I was in the residence of the Belgian Ambassador to have dinner with former Belgian Prime Minister Guy Verhofstadt who talked about his books – and I walked away with a signed copy of his Chinese version “The United States of Europe”. He promised to send us a copy of new book “The Way out of the Crisis. How Europe can save the world”.
The former PM is not too optimistic with the lack of action in the EU towards the economic downturn. He might have a point. But contrary to the USA and China where we need more and better railways, highways, bridges and other infrastructure, the EU has not so many obvious infrastructure projects to do – except if it builds the “bridges to nowhere” like in Japan. But it is true that drastic reforms in the banking sector – among others – are badly needed. The lack of action in the past in Japan on that level resulted in a long and difficult recovery – the bad scenario awaiting the EU.

As said again very clearly by top officials such as Mr. Wen Jiabao earlier in April – “The economy still faces major challenges”. Too early for optimism?
Added Fan Gang, the central bank advisor: “Major Western economies are still in the early stage of recession, which will weigh on Chinese exports, and China is still in the process of reducing inventories and adjusting overcapacity, which may not be completed until 2011. My judgment is, the recession in the global economy will last at least three to four years. We should be able to bottom out within one or two years”.
As happened several times in the past, people fail to pay attention to warnings from top Chinese officials. They proved several times to have a much clearer vision on the world economy.
Yes, the “negative figures in China are becoming less negative”. But many people still don’t realize that the ripple effect has barely started to affect business here.
Further to that, many Chinese economists and alike are becoming gloomy with their favorite savings – the USD. They think the Fed is printing too much money and the budget deficit will bring inflation and depreciation of the USD: “The depreciation of the dollar has become an inevitable historical trend” says one. So, potential losses for China’s foreign currency reserves. Not too clever anyway those people, why did they not diversify more their reserves with other currencies? A bit late now.
Unless the USA really can get back on its feet. But some Americans are not so optimistic – like Craig R. Barrett, chairman of Intel: “We are watching the decline and fall of the United States as an economic power – not hypothetically, but as we speak”. He blames, to a large extend, the “slouching education system”. Oh well, we also complain about that here.

All this talk about “stimulus packages” and “bailouts”…
A billion dollars…
A hundred billion dollars…
Eight hundred billion dollars…
One TRILLION dollars…
A newspaper article indicated that if we spent a million dollars a day every day since Christ was born (over two thousand years ago), we will not have spent a trillion dollars.
Click on the Link below.  At the end of the presentation there are step-by-step calculations and dimensions for those who may be interested.
See: http://www.pagetutor.com/trillion/index.html

Got this recently through my mail. To be honest, no idea where it came from and not sure this is for real. Also won’t buy the book. But, makes some interesting and puzzling reading! No comments…
Remember Lee Iacocca, the man who rescued Chrysler Corporation from it’s death throes? He’s now 82 years old and has a new book, ‘Where Have All The Leaders  Gone?’ and here are some excerpts.
Lee Iacocca Says:
Real book? Like the cigar though!
‘Am I the only guy in this country who’s fed up with what’s  happening? Where the hell is our outrage? We should be screaming bloody  murder. We’ve got a gang of clueless bozos steering our ship of state right over a cliff, we’ve got corporate gangsters stealing us blind, and we can’t even clean up after a hurricane much less build a hybrid car. But  instead of getting mad, everyone sits around and nods their heads when the  politicians say, ‘Stay the course.’
Stay the course? You’ve got to be kidding. This is America, not the damned ‘Titanic’. I’ll give you a sound bite: ‘Throw all the bums out!’
You might think I’m getting senile,  that I’ve gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore.
The most famous business leaders are not the innovators but the guys in handcuffs. While  we’re fiddling in Iraq, the Middle East is burning and nobody seems to  know what to do. And the press is waving ‘pom-poms’ instead of asking hard  questions. That’s not the promise of the ‘America’ my parents and yours traveled across the ocean for. I’ve had enough. How about you?
I’ll go a step further. You can’t call yourself a patriot if you’re not outraged. This is a fight I’m ready and willing to have. The  Biggest ‘C’ is Crisis ! (Iacocca elaborates on nine C’s of leadership, with crisis being the first.)
Leaders are made, not born. Leadership is  forged in times of crisis. It’s easy to sit there with your feet up on the desk and talk theory. Or send someone else’s kids off to war when you’ve  never seen a battlefield yourself. It’s another thing to lead when your world comes tumbling down.
On September 11, 2001, we needed a  strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. A hell of a mess so here’s where we  stand.
We’re immersed in a bloody war with no plan for winning and no plan for leaving.
We’re running the biggest deficit in the history of the country.
We’re losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs.
Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble.
Our borders are like sieves.
The middle class is being squeezed every which way.
These are times that cry out for leadership.
But when you look around, you’ve got to ask: ‘Where  have all the leaders gone?’ Where are the curious, creative communicators? Where are the people of character, courage, conviction, omnipotence, and common sense? I may be a sucker for alliteration, but I think you get the  point.
Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo?
We’ve spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened.
Name me one leader who emerged from the crisis of Hurricane Katrina. Congress has yet to spend a single day evaluating the response to the hurricane or demanding accountability for  the decisions that were made in the crucial hours after the storm.
Everyone’s hunkering down, fingers crossed, hoping it doesn’t happen again. Now, that’s just crazy. Storms happen. Deal with it. Make a plan. Figure out what you’re going to do the next time.
Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when ‘The Big Three’ referred to Japanese car companies? How did this happen, and more important, what are we going to  do about it?
Name me a government leader who can articulate a plan for paying down the debit, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.
I have news for the gang in Congress. We didn’t elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bonehead on Fox News will call  them a name? Give me a break. Why don’t you guys show some spine for a change?
Had Enough? Hey, I’m not trying to be the voice of gloom and doom here. I’m trying to light a fire. I’m speaking out because  I have hope – I believe in America. In my lifetime, I’ve had the privilege  of living through some of America ‘s greatest moments. I’ve also  experienced some of our worst crises: The ‘Great Depression,’ ‘World War  II,’ the ‘Korean War,’ the ‘ Kennedy Assassination,’ the ‘Vietnam War,’ the 1970’s oil crisis, and the struggles of recent years culminating with  9/11.
If I’ve learned one thing, it’s this: ‘You don’t  get anywhere by standing on the sidelines waiting for somebody else to  take action. Whether it’s building a better car or building a better future for our children, we all have a role to play. That’s the challenge  I’m raising in this book. It’s a call to ‘Action for people who, like me,  believe in America ‘. It’s not too late, but it’s getting pretty close. So  let’ s shake off the crap and go to work. Let’s tell ’em all we’ve had  ‘enough.’
Make your own contribution by sending this to everyone  you know and care about. It’s our country, folks, and it’s our future. Our future is at stake!!