China's Product Accreditation Program Upsets Foreign Technology Companies

Foreign technology manufacturers are worried about China's new Indigenous Innovation Product Accreditation Program.

In a circular that was issued last month, companies were asked to submit their products for accreditation before being included in a catalogue listing items that have Chinese characteristics, including domestic innovation. The catalogue would be used for preferential procurement by Chinese agencies and could encourage more Chinese companies to innovate and create products made in China.

Foreign businesses and trade organizations have clamored to lobby the Chinese government to halt these actions that could see more Chinese government agencies and companies buying domestic Chinese products, rather than goods made by foreign firms. A letter outlining the concerns of foreign businesses was signed and delivered to the Chinese government yesterday by over a dozen business leaders, including Michael Barbalas, president of the American Chamber of Commerce in China; Perrin Beatty, president of the Canadian Chamber of Commerce; and Tsutomu Handa, president of the Japan Electronics and Information Technology Industries Association.

The letter was addressed to Wan Gang, head of China's Ministry of Science and Technology; Xie Xuren, head of the Ministry of Finance; and Zhang Ping, chairman of the National Development and Reform Commission. The letter pleads for the "Chinese government not to proceed with the requirements of the joint circular" and stresses that the group of foreign entities actually wants to encourage innovation.

None of the three ministries have publicly replied to the joint letter.