U.S. Treasury Secretary James A. Baker III said today that Chinese officials had promised to "try very hard" to resolve a wide range of problems confronting American businessmen investing in China.
Baker also said Premier Zhao Ziyang told him that the Chinese wanted to work toward a resolution of difficulties facing the Beijing Jeep Corp., a joint business venture here partly owned by American Motors.
China faces a shortage of foreign exchange, which has led to a decision by the American managers of the $51 million, showcase Jeep company to halt production, at least for some weeks, starting next month. The foreign exchange is used to buy kits of Cherokee Jeep parts, which are shipped from the United States to China, where they are assembled.
The treasury secretary said that Zhao, in a meeting with Baker, raised the question of AMC's problems, and Baker said that he felt confident that the problems would be resolved.
In addition to foreign exchange problems, Baker said he had raised with the Chinese "serious problems about doing business here." Among these, he said, were high costs, lack of skilled workers and uneven application of tax laws and regulations.
Baker said at a press conference that Chinese officials had told him they "very much want to see greater foreign investment in China" and were open to suggestions.
"I would tell American businesses that are suffering from these problems to hang in there," Baker said. "It's my honest view that the Chinese want to encourage greater foreign direct investment and that they're going to confront these problems and deal with them."
But Baker indicated that there had been no movement toward resolving differences over a projected U.S.-China investment treaty, which the United States argues would greatly improve American investment prospects here.
The United States and China have held six formal rounds of negotiations over an investment treaty, with the talks currently at an impasse. U.S. officials say that the differences between the two sides cover how to arbitrate disputes, deal with expropriations and insure that a joint venture has the same access to raw materials as a Chinese enterprise would.
Baker said that the "general mood" on both sides governing investment was "not as positive as it should be."
Some American business representatives here who have been grumbling for months about investment conditions viewed Baker's comment as the understatement of the year. "Disgruntled business people all over town are losing their shirts, and that's all he has to say?" one of them said.