by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Reshma Kapadia of Barron’s highlights disturbing challenges for American companies doing business in China.
Lester Ross has headed law firm WilmerHale’s office in Beijing since it opened in 2004, advising companies on investment, trade, and regulatory matters in China. Below is an edited interview with Ross on issues his clients face.
How have things changed for U.S. companies operating in China?
After joining the World Trade Organization, China moved toward reforms and opening up to the world. But under [President] Xi, things have moved in a new direction, increasingly perceived to be incompatible with the values of the wider world. For example, companies selling products used directly or indirectly to repress people in Xinjiang [a Chinese province] didn’t exist, at least at this scale, before.
You’re referring to Chinese facial-recognition and video-surveillance start-ups blacklisted by the U.S.
That creates an impact: You can’t sell to a particular company even though the product can be used for multiple purposes. This [problem] has grown.
Content is also increasingly subject to censorship, which makes it more difficult. [Media] companies are saying they will distribute [content] by subscription services, not cinemas. There are multiple reasons, but one is so they don’t have to worry about the large-screen distribution and their product not being sold. And it’s not just U.S. companies; even those with no political content [face challenges]. For example, wine and coal shipments have slowed clearing customs.