U.S. still concerned on China innovation rules

BEIJING Tue May 25, 2010 2:02am EDT

BEIJING (Reuters) - The United States is concerned that China's revised proposals to promote innovation will still discriminate against American firms, U.S. Trade Representative Ron Kirk said on Tuesday.

China's officials tried to reassure their U.S. counterparts on Monday that the latest Chinese draft on "indigenous innovation" policies had resolved U.S. concerns on intellectual property protection.

But there could still be some cause for worry, Kirk told Reuters in an interview during the two-day Strategic and Economic Dialogue between U.S. and China officials in Beijing.

"The challenge is because of the absence of transparency, (it) leaves a lot a lot of very serious policy questions for our industry and our team. What we've expressed to China is every country in the world, right now, is rightfully trying to incentive innovation," Kirk said.

"That's not a bad thing, but if you do so in a way that we think unfairly discriminates and operates to the favor of your domestic industry versus foreign industries, then that's not a good thing."

Kirk's comments are the first public reaction from U.S. officials after China said its new rules had satisfied concerns of American companies and officials.

During the interview, Kirk also said talks with China were more focused on dialogue, rather than "big bang" achievements, and that Chinese officials had complained about perceived U.S. congressional bias against China.

Kirk also said China's progress in intellectual property protection and market access barriers could be more important than its yuan reforms.

"All these could be as valuable, if not more valuable frankly, than whatever we accomplish on the exchange rate," he said. "But all of those go to our underlying ability to come in and fairly compete in this market."

(Writing by Lee Chyen Yee; Editing by Ken Wills)