WASHINGTON - Few American industries have had more success in selling goods to China than makers of medical devices like X-rays, pacemakers and patient monitors. Which is why a recent Chinese decree was so troubling.
The directive, issued in June, called for burdensome new safety inspections for foreign-made medical devices - but not for those made in China. The Bush administration is crying foul.
Even more worrisome to the administration is that the directive seems part of a recent pattern in which Chinese officials issue new regulations aimed at favoring Chinese industries over foreign competitors, despite efforts by Treasury Secretary Henry M. Paulson Jr. to ease economic tensions.
"There is clearly a growing economic nationalism in China that is leading to discrimination against foreign investors in pillar sectors of the economy," said Myron Brilliant, vice president for Asia at the US Chamber of Commerce. "It's not only a threat to foreign investors, but it also undermines China's transition to a marketbased economy."
The Chinese actions and the administration's concerns threaten to roil the atmosphere when Paulson goes to China in early December with other Cabinet members in another round of the "strategic economic dialogue" that he began in September 2006. After seeking to defuse lingering trade disputes with China for the last 15 months, Paulson instead may have to tamp down fresh outbreaks.
The medical device industry is one of several that seem to have been the target recently, administration officials say. The fear in Washington is that the growth of sales by big manufacturers like Medtronic, Johnson & Johnson and Boston Scientific, which have doubled since 2002, could be set back.
If this decision is not reversed," said Nancy S. Travis, a vice president of AdvaMed, the industry trade association, "it will result in boxes and boxes of medical devices piling up in Chinese ports, while potentially similar domestically produced medical devices are freely sold in the market."
