Chinese premier moves to reassure foreign investors

CHINESE PREMIER Wen Jiabao has tried to reassure overseas investors that China will step up efforts to guarantee level playing fields for foreign firms, after strong criticism in recent weeks that China unfairly puts domestic firms first.

In a speech yesterday to the fourth World Economic Forum in Tianjin, known as “summer Davos”, Mr Wen painted a positive picture of the Chinese economy and hailed the success of the country’s stimulus package which kept Chinese growth on track despite the slowdown. He said Beijing would now focus on maintaining stable macro-economic control policies.

“The past two years have seen China emerge as one of the first countries to achieve an economic rebound and maintain steady and relatively fast economic development under extremely difficult and complicated economic circumstances,” he said.

His efforts to soothe foreign investors are a clear sign that China is eager not to endanger precious foreign investment.

Earlier this year China rolled out its new Indigenous Innovation Product Accreditation Programme, which the EU chamber of commerce last month described as an effort to promote domestic innovation by favouring Chinese companies in its multibillion-dollar annual purchases of computers and other technology, shutting foreign firms out of the government procurement market in favour of “national champions”.

The US chamber of commerce has also complained about the business environment for its members being skewed in favour of domestic companies.

“We will continue to improve foreign-related laws and regulations and improve the environment for foreign companies,” said Mr Wen, adding that he believed “rising investment demonstrates rising confidence by foreign companies in China market”.

He also made the unusual step of taking some of the blame for tensions over the controversial policies.

“It’s not all about misunderstanding, it’s about the not-so-clearly defined policies on our part,” Mr Wen said. “All foreign businesses established according to law will receive national treatment, on procurement, on intellectual property rights. Foreign and domestic businesses will be treated as equals.

“We will improve the relevant laws and regulations.”

The speech contained indications about what will come up in the 12th five-year plan, the document that will decide much of China’s forthcoming economic policy.

China would act to curb property market speculation and maintain stable housing prices and would speed up development of low-income housing.