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Commerce Secretary Pritzker warns U.S. business: Keep your ‘eyes wide open’ in China

October 9, 2014, 12:01 AM UTC
Krista Kennell/Fortune Most Powerful Women

U.S. Commerce Secretary Penny Pritzker warned American companies doing business in China to have their “eyes wide open” for threats to their intellectual property.

“You have to be concerned and we have to be vigilant,” Pritzker told Fortune’s Nina Easton during an interview at the Most Powerful Women Summit.

That likely won’t register as a major revelation to American outfits who’ve confronted the challenges of operating there, but it was a stark reminder from the Obama administration’s top ambassador to business. The Chinese, Pritzker noted, have said that “they want a more open and modern type of an economy, but the actions don’t match up with that right now.”

The danger goes beyond threats to propriety technology. Pritzker pointed to the Chinese strategy of using their antimonopoly laws to force changes in the pricing structures of American companies. More broadly, she flagged issues surrounding procurement, rule of law, and government transparency as areas of concern.

Back home, Pritzker heralded an economic recovery that’s created more jobs than Europe, Japan and the rest of the developed world combined — without generating bubbles. “If you look out at our economy, it’s strong. It may not be as robust as somebody wants in one place or another, but it’s strong in a broad set of sectors,” Pritzker said. “This is the kind of growth we can continue to build on. It’s not got huge fragilities in it.”

In a reminder that Washington policymakers have more work to do if they want to accelerate the turnaround, investor Warren Buffett closed out the session by nudging Pritzker on corporate tax reform. After praising her selection, he suggested that “perhaps you could get Ron Wyden and Orrin Hatch [respectively the top Democrat and Republican on the tax-writing Senate Finance Committee], and privately, no announcement, but just give them some thoughts on what should be in a new corporate tax code, and give them a lot of encouragement on getting it done in the next six months.”

Pritzker told him she “couldn’t agree more,” that our code “is not competitive globally” and fixing it is “very high priority.” But asked by Easton whether it will get done by the end of her tenure, Pritzker demurred. “We’ll see,” she said.