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WASHINGTON: US Treasury Secretary Janet Yellen called on Thursday (Dec 14) for China to shift from a state-driven approach in economic policy, saying that this can discourage investors.
“Too strong a role for state-owned enterprises can choke growth and an excessive role for the security apparatus can dissuade investment,” she added, at the US-China Business Council’s 50th anniversary dinner in Washington.
US companies have long complained about what they see as an unfair business environment in China, with limited protection for intellectual property and preferential treatment afforded to domestic competitors.
The fears were worsened this year by a crackdown on US consulting firms operating in the country, and Washington has been pushing for a more predictable business environment and level playing field.
Citing a recent US-China Business Council member survey, Yellen noted that firms are reconsidering investment plans and said this should be concerning for Beijing.
A bigger proportion of companies signalled plans to move some operations out of China in the 2023 survey than in any year since 2016.
The trends point to potential benefits in China “pursuing structural reforms”, Yellen said.
“For too long, American workers and firms have not been able to compete on a level playing field with those in China,” she added.
“The PRC deploys unfair economic practices, from non-market tools, to barriers to access for foreign firms, to coercive actions against American companies,” Yellen said, referring to the People’s Republic of China.
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