The American medical device industry, according to some China experts, may be a victim of retaliation by some Chinese authorities because of complaints by the United States over unsafe and dangerous exports of Chinese products.
These experts say China’s consumer product safety authority has been discredited by the recent disclosures of tainted products. That appears to have opened the door for a separate customs bureaucracy, which issued the new regulation that worries the Bush administration, to grab power from a rival agency.
“I can’t tell you how many companies have come up to me — software, chemicals, autos — who say they’re concerned about the trend,” said a senior administration official, speaking anonymously to avoid antagonising the Chinese. “We’re very troubled about the long-term direction on some of these policies.”
The American concerns are shared in Europe, which like the United States, is growing more upset about the trade deficit with China. “What we’re seeing are growing industrial interests lobbying state authorities in China and giving them preferential treatment,” Peter Mandelson, the top trade envoy of the European Union, said in an interview. “The result is clear discrimination against foreign companies.”
There has been little progress on Paulson’s top priority of getting China to let the value of its currency rise, a step that would make imports from China more expensive and exports to China cheaper, and there are worries that the dialogue will increasingly be seen as useless.
The medical device industry is one of several that seems to have been the target recently, administration officials say. The fear in Washington is that the growth of sales by big manufacturers like Medtronic, Johnson & Johnson, and Boston Scientific, which have doubled since 2002, could be set back.
... contd.