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Why China is worrying US CEOs: Pritzker

US firms most concerned about this in China

U.S. commerce secretary Penny Pritzker, who is a leading a delegation of CEOs on a five-day trip to China, told CNBC progress is being made in addressing the concerns of American businesses operating in the mainland.

"One of the biggest concerns [American companies] have is about intellectual property protection, making sure that what they know how to do, they can bring to the market place, but that they're not going to lose what is so important," Pritzker told CNBC.

While China has laws in place to protect intellectual property rights, the problem lies in their enforcement, she said.

"We had frank conversations about challenges facing American businesses. They have said they want to address this because China wants to be an innovative economy," Pritzker said.


In a survey conducted by the American Chamber of Commerce and Bain & Company earlier this year, 47 percent of U.S. businesses polled said they felt less welcome in China than before, up from 44 percent last year.

Fifty-seven percent of respondents believed foreign firms were specifically targeted in recent enforcement campaigns, and more than 50 percent said such campaigns are having a negative impact on their intent to invest further in China.

Last year, several high-profile multinationals including Microsoft, GlaxoSmithKline, Qualcomm, Audi and McDonald's were the targets of aggressive probes around health and safety, anti-trust and anti-monopoly practices.

The national flags of the U.S. and China.
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"There are a number of American CEOs who are very concerned. We are working on these issues, whether they are issues around cyber security regulations, proposed banking laws, intellectual property protection or the use of the anti-monopoly law," she said.

One area where progress has been made is around making sure the anti-monopoly law is not applied in any discriminatory fashion against foreign firms, said Pritzker.

Sitting out the AIIB

When asked whether there were any concerns that the Washington's decision to sit out the Asian Infrastructure Investment Bank (AIIB) could potentially lead to American companies losing out on large infrastructure projects she said:

"We welcome an AIIB that lives up to international standards of the other multilateral institutions that are investing in infrastructure like the World Bank, IMF (International Monetary Fund) and ADB (Asian Development Bank)."

"Our objective is to make sure there is good investment in infra throughout this region. I think the AIIB, if they can live up to international standards, could be institution that can collaborate with other multilateral institutions," she added.