Many companies have highlighted China's recent measures to support "indigenous innovation", which is also a major concern related to industrial policy. Relative government departments have made it clear that indigenous innovation serves the interests of both the US and China, and innovation is no excuse for discrimination, he said.

Jiang agreed with Kirk on the point, while saying "as a matter of fact, it is foreign corporations that often benefit from more preferential policies in China, than indigenous ones."

"China is making a consistent effort to establish a fair regime pursuing the doctrine of national treatment, which means every market participant, regardless of their nationality, should be treated equally," Jiang added.

Kirk said although China has already made efforts to address US concerns, both sides need to work out more win-win trade policies.

"We appreciate efforts China's government has made to address our concerns, but we have urged them to refrain from further steps down this path. Instead, we need to sit down and talk about how to foster real innovation to benefit us all, " he added.

US Commerce Secretary Gary Locke expressed the same concerns recently during an interview with China Daily, saying the US is concerned about China's increasing use of industrial policies that may restrict market access and discriminate against foreign goods and services.

"China has made incredible progress on the IPR regime during the short period of less than 30 years," Jiang said, but "flaws do still exist, and the best way to find solutions is to intensify the dialogue and enhance mutual understanding."

Premier Wen Jiabao reassured foreign companies last month that they will not face discrimination in the country as the government will "unswervingly" continue its push to open up and thereby facilitate foreign investment.

"The policy of encouraging indigenous innovation treats all businesses in China the same. It will not exclude foreign companies," Wen said.

(Xinhua News Agency May 22, 2010)