Don't Let Iran Hijack the U.S.-China Strategic and Economic Dialogue

Monday's Strategic and Economic Dialogue between the United States and China provides the Obama administration with an opportunity to forge agreements in a number of areas of crucial significance for both U.S. economic competitiveness and strategic stability in Asia--but only if U.S. negotiators are willing to give non-headline topics the attention they deserve.

At this time of economic uncertainty, the future of the American economy is firmly linked to the ability of U.S. companies to compete for marketshare in China, the world's fastest-growing market. So U.S. Treasury Secretary Geithner's agenda should not overstress the revaluation of China's currency. Despite the degree of media attention paid to the issue, nearly 80% of U.S. firms in China don't expect a revaluation to increase their profits, according to a recent American Chamber of Commerce in China survey. Rather, across a host of industries, Chinese commercial rules give domestic firms an unfair leg up over American ones, and this is the more significant reason U.S. companies have been unsuccessful in cracking the Chinese market.

Secretary Geithner should start with China's vexing rules limiting ownership of Chinese ventures by foreign companies. These rules empower Chinese partners to demand the transfer of high-end technologies in exchange for access to China's market. In recent years, Beijing forced companies like Siemens and Kawasaki to enter into joint ventures before bidding on multi-billion dollar high-speed rail projects. Today, Chinese venture partners and the national railway ministry are using the same foreign companies' own technology to outbid them around the world--including the building of California's new high-speed rail infrastructure.

Government procurement rules are another major source of trouble. To sell to state-owned enterprises, which control over 50 percent of total industrial assets in China, or to the Chinese government, multinational companies are forced to battle a constant stream of new policies discriminating against them.

Read more at the Huffington Post