U.S. Tech Companies Slam New China Trade Proposal

The Indigenous Innovation Product Accreditation System would require that the intellectual property used by Chinese government agencies be developed and owned in China. The program would also require that any trademarks be originally registered in China.

A proposed Chinese trade policy is sparking deep concern from U.S. trade companies seeking to sell computers, software, communications products and other office products to Chinese government agencies. The policy would require the intellectual property used in those products to be developed and owned in China.

The Indigenous Innovation Product Accreditation System, first announced Nov. 15 and set to go into effect Dec. 10, would also require that any trademarks be originally registered in China.

"The Accreditation Program ... runs directly counter to the commitment of President Hu and other world leaders to pursue open trade and investment policies and avoid protectionism," the SIIA (Software & Information Industry Association) and other business and technology association leaders from Japan, Korea, India, Canada and Europe said in a Dec. 10 letter to the Chinese government. (PDF)

The letter added, "Not only is the compressed application deadline of Dec. 10, 2009, unworkable, but the very restrictive and discriminatory program criteria would make it virtually impossible for any non-Chinese supplier to participate-even those non-Chinese companies that have made a substantial and long-term investments in China, employ Chinese citizens and pay taxes to the Chinese government."

SIIA President Ken Wasch, in a separate statement, called the proposed policy troubling.

"Implementation of this system will restrict China's capacity for innovation, impose onerous and discriminatory requirements on companies seeking to sell into the Chinese government procurement market, and contravene multiple commitments of China's leadership to resist trade and investment protectionism and promote open government procurement policies," Wasch said.