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The Chinese government is facing a volley of protests from industry associations in Europe and US over a new rule, requiring technology companies to obtain a special accreditation. These associations say the rule is meant to give preference to Chinese companies and keep them out of multi-billion businesses.

The government accreditation will be awarded to companies that are capable of "indigenous innovation" instead of relying entirely on imported technology. The idea is to grant accreditation to companies with products and technologies that have Chinese characteristics and evidence of domestic innovation.

Three government ministries have said they will come out with special catalogs containing products of accredited companies. Such products will get preference when it comes to purchases by government departments.

The new law says that at least some of a product's component parts or technology should be developed locally in order to be considered for government tenders. The American Chamber of Commerce in China has said the move would "reduce competition and limit the ability of Chinese government agencies to make purchases solely on the basis of quality and price".

About 30 business groups from the US, Europe, Japan and South Korea have sent out letters to ministries "to strongly urge the Chinese government not to proceed" with the new rule. The foreign business groups said the new rule discriminated against multinational companies and ultimately would hurt Chinese government agencies.

Ministries have not formally replied to the letter. But a Chinese expert said foreign companies are exhibiting their sense of insecurity and opposition to growth of innovation in China. They should join hands with Chinese firms.


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