China Signs Deals Worth US$10 Billion with U.S. Companies

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Apr. 28 – At yesterday’s forum hosted by the U.S. Chamber of Commerce and the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, Chinese companies signed 32 contracts with American companies worth US$10.6 billion.

These companies included Ford Motor Co., International Business Machines Corp., Dell Inc., Cisco Systems Inc., Hewlett-Packard Co., Microsoft Corp., EMC Corp., Oracle Corp., Sun Microsystems Inc. and Amway Corp.

The new round of deals comes at a time when the slowing U.S. economy has led to dropping export demand in China. By the last quarter of 2008, the United State’s deficit decreased by US$132.8 billion.

A senior vice president for Cisco in Beijing, John Ng, told Bloomberg said in that his company’s contracts with China Mobile, China Telecom Corp. and China Construction Bank Corp. was worth an estimated US$300 million.

The contract signings also come when foreign businesses working in China have recently warned about rising protectionism in the country. The American Chamber of Commerce in China said in its 2009 White Paper, that protectionism was a top concern this year and that national policies using stimulus money is mostly limited for Chinese companies.

Beijing has always maintained restrictions on foreign investment in industries like the railway system, postal service, autos, chemicals and information technologies where it wants to nurture local or state-owned companies.

Morever, analysts told WSJ that some form of  protectionism is built into China’s decentralized political structure that affects both local and foreign companies. Due to decentralization, even provinces will practice local protectionism and will ban purchases made from outside the province.