Xi pledges equal treatment for foreign and local firms
Denise Tsang in Xiamen
Vice-President Xi Jinping has promised better treatment for foreign investors following complaints that the mainland is slipping back into protectionism.
Kicking off the 2nd World Investment Forum yesterday, Xi said the mainland would treat domestic and foreign firms the same for government procurement contracts and would tighten protection of intellectual property rights.
His comments follow recent criticism of Beijing's economic policies by the European Union Chamber of Commerce in China, the biggest European trade organisation on the mainland.
The EU Chamber complained last week that the country was an 'excessively regulated' market, foreign firms were still treated unequally and rules and regulations remained unpredictable and opaque even after 30 years of reform.
Xi hit back at the criticism, citing a string of statistics to demonstrate the country's commitment to improving its investment landscape and creating a level playing field.
'China is committed to a transparent regulatory regime: we have revised the guidelines for foreign investment four times during the past 30 years of reform,' he told about 1,200 state leaders and investors at the biennial meeting commissioned by the United Nations Conference for Trade and Development.
'China will broaden and deepen its market reform for sustainable growth.'
Xi, who did not pinpoint any specific complaints on mainland handling of foreign firms, said the government would treat enterprises fairly and in accordance with its commitment to the World Trade Organisation.
He said that about 55.4 per cent of the 12,000 government procurement projects up for grabs last year were awarded to foreign enterprises.
This effectively blunted the EU Chamber's criticism that foreign firms faced discrimination in the race for government projects under a series of 'buy Chinese' rules and tender regulations released over the past 16 months.
Xi said the mainland's liberal reform had borne fruit, with foreign firms contributing 22 per cent of the country's tax revenue, 55 per cent of total trade, 50 per cent of technology imports and 45 million jobs.
He pointed out that the manufacturing sector, most of the agricultural sector and more than 100 service industries were open to foreign players. The EU Chamber complained that foreign players were shut out of the telecommunications sector, online air ticket reservation services and the wholesaling of petroleum products.
Core players in these sectors are state-owned firms.
The Ministry of Commerce estimated that as much as US$100 billion of foreign direct investment would have poured into the mainland by the end of this year.
That compares with US$90 billion last year.
The flow of foreign direct investment worldwide could face 'a retrenchment' until 2012 when the global economy was expected to recover fully from the financial crisis, Unctad secretary general Supachai Panitchpakdi said yesterday.
'A new generation of investment policies is needed,' he said.