Foreign investors attracted by China’s economic boom are now wondering whether their agreements will be fully honored, Ira Shapiro, former general counsel to the Office of the United States Representative, said in Atlanta last week.
“You will hear more talk about China living up to its commitments,” he said. “The first reports were positive, but now the picture has changed. We are hearing from investors that they have honored one part (of their agreements) but not others.”
He cited as an example auto manufacturers who have been allowed to build plants, but then did not receive the financing that they allegedly were promised.
He also said foreign investors continue to be concerned about intellectual property rights in China.
Speaking at a seminar held at the Buckhead office of the law firm Greenberg Traurig LLP, Mr. Shapiro called the widespread recognition around the world of China’s new economic status in the past year as “extraordinary.”
As recently as six months ago, he added, China’s emergence as the leading recipient nation of foreign direct investment was barely noticed by the media.
But, he said, its new economic status was foremost on the minds of the business and government officials in September at the Fifth WTO Ministerial Conference in Cancun, Mexico, which he attended.
“This investment is not just in low-end manufacturing,” he added. “There is a huge amount of investment in the automotive sector and Motorola is now the largest investor in China.”
Despite the concerns about the U.S. trade deficit with China, he did not think that the U.S. Congress would change tariff rates to force China to revalue its currency. “China only has a trade imbalance with the United States, not its other trading partners,” he added.
Mr. Shapiro is currently based in Greenberg Traurig’s Washington office. During the Clinton administration, he played a key role in completing the negotiations on the Uruguay Round, which established the WTO global trade rules, and Nafta. As the chief U.S. trade negotiator with Japan and Canada, he helped open the Japanese market to U.S. autos and auto parts, semiconductors and insurance.
He may be reached at (202) 331-3102 or send an email to HYPERLINK mailto:firstname.lastname@example.org email@example.com