ANNUAL REPORT

53
Table 3: Top Five Business Challenges in China Reported by U.S. Firms,
2012–2016
2012 2013 2014 2015 2016
Shortage of
qualified management:
43%
Inconsistent
regulatory
interpretation
and
unclear laws:
37%
Shortage of
qualified employees:
29%
Obtaining
required
licenses:
26%
Corruption:
26%
Labor costs:
44%
Inconsistent
regulatory
interpretation
and
unclear laws:
38%
Shortage of
qualified employees:
35%
Corruption:
30%
Shortage of
qualified management:
30%
Labor costs:
61%
Inconsistent
regulatory
interpretation
and
unclear laws:
39%
Shortage of
qualified employees:
37%
Shortage of
qualified management:
31%
Obtaining
required
licenses:
31%
Labor costs:
61%
Inconsistent
regulatory
interpretation
and
unclear laws:
47%
Shortage of
qualified employees:
42%
Shortage of
qualified management:
32%
Increasing
Chinese protectionism:
30%
Inconsistent
regulatory
interpretation
and
unclear laws:
57%
Labor costs:
54%
Obtaining
required
licenses:
29%
Shortage of
qualified employees:
29%
Industry
overcapacity:
29%
Source: American Chamber of Commerce in the People’s Republic of China, “2016 China Business
Climate Survey Report.”
Information and Communications Technology and Cybersecurity Policies
Over the past several years, the foreign investment climate for companies
in the information and communications technology (ICT) sector
has worsened, as Beijing has strengthened oversight and control over
foreign companies. Part of this reflects an unprecedented drive under
the Xi Administration to deliver on domestic industrial innovation
goals. 126 Through two central government plans, the “Made in China
2025” initiative and the “Internet Plus” plan introduced in 2015, President
Xi has increased state support for domestic technology companies,
putting foreign companies at a competitive disadvantage. 127 (For more
on these initiatives, see Chapter 1, Section 3, “13th Five-Year Plan.”)
National security is the other key driver behind China’s increasingly
tough line on foreign technology companies. 128 Emboldened by allegations
in 2013 regarding the U.S. government’s use of U.S. companies to
conduct cyber espionage, along with a more general desire to increase
Chinese authorities’ ability to monitor domestic Internet discourse and
activity, Beijing has argued it must reduce its dependence on foreign
technology. 129 Over the past year, Beijing has introduced stricter ICT
requirements and stronger cybersecurity policies. Many of these measures
involve “secure and controllable” technology requirements; while
the term is not clearly defined, foreign companies and industry groups
fear it would compel foreign companies to give the Chinese government