Chinese President Pledges China Will Not Discriminate Against U.S. Businesses; Broad Healthcare Partnership Unveiled

The public-private partnership includes Pfizer, Johnson & Johnson, Abbott, Medtronic, General Electric, Chindex and Microsoft.

WASHINGTON, D.C. - In introducing China President Hu Jintao at a luncheon reception Jan. 20, former Secretary of State Henry Kissinger said that if China and the U.S. work together most of the problems between the two nations "will find a creative solution," but if the two nations can't do that, then "there is no possibility for one side or the other achieving a success over the other."

Kissinger said that the Chinese president's four-day visit to the U.S. was a success not because it solved any problem but because it showed "the way for how problems can be solved."

During his speech at the luncheon, which was hosted by the U.S. China Business Council (USCBC) and the National Committee on United States-China Relations, President Hu said that China-U.S. relations have reached "unprecedented breadth and depth" and have never "enjoyed such broad common interests and shouldered such important common responsibilities as we do today."

At the same time, he mentioned "mutual respect" and "mutual trust" more than a dozen times during his speech, and stressed that China is a developing country that "still has a long way to go before we can achieve our national development goals." The Chinese leader said that development - particularly scientific development that puts people first - will solve China's problems.

Hu stressed the importance of long-term goals for cooperation and exchanges in science and technology and education, with more dialogue between Chinese and American legislatures, local authorities, business communities, academic institutions, media organizations and other sectors.

U.S. Secretary of Commerce Gary Locke praised the two presidents for their agreements to promote innovation and investment.

They agreed on deals that will increase U.S. exports by more than $45 billion, as well as increase China's investment in the United States, President Barrack Obama said during a Jan. 18 press conference.

In 1979, when diplomatic relations were begun, the two nations traded roughly $2.5 billion, but last year that amount reached $380 billion, Hu said during a Jan. 19 meeting with business leaders. "Our mutual investment also started from virtually nothing to an accumulation of $70 billion," he said.

Level Playing Field For American Businesses In China

USBC said it was pleased with the commercial outcomes announced, which touched on contentious issues such as long-standing intellectual property concerns and newer concerns such as China's "indigenous innovation" policies.

China's stance on indigenous innovation, in particular, has been a lightning rod for U.S. and European companies, as it could lead to discrimination against foreign products in government procurement and force foreign companies to move R&D operations to China to access its market (Also see "Long-term Backer Of Stronger Trade Ties With China, U.S. Senator Warns Of Potential Economic Face-off" - Scrip, 15 Oct, 2010.).

In the healthcare sector, there is a concern that such policies could eventually impact purchases made by government-run hospitals, which dominate the market.

"China's pledge to separate its innovation and government procurement policies is new and potentially significant," said USCBC President John Frisbie. "This was one of USCBC's top advocacy priorities for President Hu's visit. The use of market-distorting government purchase preferences to foster innovation is counter to international best practices and has tilted the playing field against foreign companies."

During the Jan. 18 press conference at the White House, President Obama stressed the need "for a level playing field for American companies competing in China."

However, President Hu had a different message for American entrepreneurs during his state dinner at the White House Jan. 18: "We welcome you as companies to China," he said. "China follows reform and is opening up. We will, as always, try to provide a transparent, just, fair, highly efficient investment climate to U.S. companies and other foreign companies.

"I also wish to tell you that all companies registered in China are given national treatment. In terms of innovation products, accreditation, government procurement, IPR protection, the Chinese government will give them equal treatment."

Likewise, he told Chinese entrepreneurs that the Chinese government will "support you in making investments and doing business here in the United States."

Obama said he welcomed President Hu's commitment that American companies would not be "discriminated against when they compete for Chinese government procurement contracts," adding, "and I appreciate his willingness to take new steps to combat the theft of intellectual property."

China And Washington Unveil New Healthcare Partnership

Washington and Beijing also unveiled a major new public-private healthcare partnership during Hu's trip.

The just-launched alliance links up the U.S. Department of Health and Human Services, the U.S. Department of Commerce and the U.S. Trade and Development Agency with China's Ministry of Health and Ministry of Commerce, along with a dozen American companies and six organizations including the Pharmaceutical Research and Manufacturers of America, the Advanced Medical Technology Association, USBC and the American Chamber of Commerce in China.

As part of the agreement, USTDA will sponsor an exchange program of healthcare professionals that will include "a series of visits by Chinese healthcare officials to the United States to share best practices and witness new and innovative technologies that will be important to long-term healthcare delivery," HHS says in an online statement.

The HHS release quotes Commerce Secretary Gary Locke as saying: "The partnership will draw its strength from U.S. companies strategically working together to help China achieve its development goals that will open new export markets for U.S. goods and services."

The partnership will also expand to step up cooperation in health-related professional training, rural healthcare and medical information technology, HHS says.

U.S. firms joining the initiative include Pfizer, Johnson & Johnson, Abbott, Medtronic, General Electric, Chindex and Microsoft.

HHS Secretary Kathleen Sebelius stated in the online report that: "This partnership builds on a strong foundation of bilateral cooperation in this critical sector of our economies."

Zhu Shen, CEO of the San Diego-based consulting firm BioForesight, said the new pact could be the most important since the two Pacific powers approved an agreement between HHS and the Chinese Ministry of Health in December of 2007 that paved the way for U.S. FDA to open offices in three Chinese cities (Also see "Import Safety Agreement Further Entwines FDA/China Regulatory Process" - Scrip, 17 Dec, 2007.).

Shen said in an interview that the new alliance is notable for "the comprehensive scope of the collaboration and the impressive number of multinational healthcare companies involved at this stage." She also pointed out that the public-private partnership includes more medical device, diagnostic and equipment companies, "while Pfizer is the only pure-play pharma on the list."

"Going forward, I expect to see more pharma companies joining in," Shen predicted.

The BioForsight CEO, who is also a member of the PharmAsia News advisory board, also predicted that the new pact could open the way for much broader cooperation between the two sides.

"As the world's top two superpowers," she said, "China and the U.S. both increasingly recognize they have much more to gain from cooperation than pure competition."

With this partnership, she added, "China can get on a faster learning curve with U.S. help on regulatory, R&D innovation, adopting modern, high-tech healthcare services and management, while the U.S. can gain wider access to the rapidly growing Chinese healthcare market."

Shen also forecast that the initiative could give rise to greater investment in Chinese healthcare by the private sector in the U.S.

"Given the well-timed announcement that coincided with President Hu Jintao's state visit," Shen said, "the agreement's significance and long-term impact will play out in the years to come."

"Companies whose technology/know-how fits well with Chinese demand and those with a solid relationship with China and the Chinese government will be well-positioned to reap the rewards," she predicted.

"The two countries cannot be expected to agree on longstanding issues with trade, currency, human rights, etc.," she noted, "but the focus on common ground and collaboration on areas with mutual benefits, for example, healthcare, climate change, renewable energy, is a major step in the right direction."

Shen predicted in an earlier interview that a meeting between Obama and Hu in April of 2009 would boost the pharmaceutical sector in each country and the potential for pan-Pacific partnerships (' (Also see "Barack Obama's Meeting With Chinese President Bodes Well For Pan-Pacific Pharma Partnerships, Says Analyst During Shanghai Conference" - Scrip, 10 Apr, 2009.)).

Tamra Sami ([email protected]) and Kevin Holden ([email protected])

[Editor's note: This article appears courtesy of PharmAsiaNews.com, Elsevier Business Intelligence's source for Asian biotech and pharmaceutical news. Register for a 30-day risk free trial.]