China urged to ease rules on foreign investments
The European Union has renewed pressure on China to remove restrictions on foreign investments, blamed for dwindling bilateral trade.
EU commissioner for external trade Catherine Ashton yesterday added to complaints from the EU and United States chambers of commerce about Beijing curtailing foreign direct investments by what she called 'equity caps, unnecessary joint-venture obligations or restrictions in sectors considered strategic'.
Ashton, who was speaking on the second of the four-day China International Fair for Investment and Trade in Xiamen, Fujian province, pressed state policymakers to create 'a more ambitious' partnership and 'a more advantageous climate for investment' during a high-level Sino-EU economic dialogue next week.
'The EU welcomes foreign investment. All we ask in return is that European investors enjoy the same openness and equal treatment in other markets including China,' Ashton said during her first official visit to the mainland.
'We should also try to remove existing barriers progressively in order to boost our investment to a level that does our trade relationship justice.'
The EU's concerns about mainland trade restrictions were partly addressed on Tuesday after Minister of Commerce Chen Deming said caps on foreign investors' shareholdings would be 'lowered gradually' and foreign access to the service sector would be made available.
The EU Chamber of Commerce in China said the lack of equal treatment for domestic and foreign companies had seen four foreign-invested wind-power firms in Shanghai, Shandong and Tianjin thrown out of the bidding for a Euro5 billion (HK$56.19 billion) project for 25 wind turbines.
Assistant minister Wang Chao said China remained the most attractive market for foreign investments, with the amount of foreign direct investments leading emerging countries for the past 17 years.
He said the ministry would continue to eliminate administration charges and grant local offices power to approve projects to encourage investors from abroad.
Although China's foreign direct investments shrank 20.3 per cent to US$48.3 billion in the first seven months of this year from the same period last year, the nation's foreign-exchange reserves rose to US$2.1 trillion as of the end of June from US$2 trillion in April, Wang said.
He said the robust reserve provided 'a solid foundation' for Chinese firms investing overseas through mergers and acquisitions and outsourcing projects.