It should have been a historic week for the foreign investment community. President Jiang Zemin flew to Shanghai to meet 500 delegates at the Fortune Global Forum, who received the kind of adulation in the official press that used to be reserved for model workers and soldiers. On Tuesday, the People's Daily carried on its front page a picture of Mr Jiang with chief executives - a message that they have an essential place in the mainland's next 50 years, just as the workers and soldiers did in the last 50. But then the images changed. Foreign Trade Minister Shi Guangsheng left Washington after just one day of talks on mainland admission into the World Trade Organisation, with no progress made, and his deputy, Long Yongtu, went on CNN to say the mainland had offered a deal on April 22, which the United States must take or leave. While neither government published details of the deal - which the mainland amended from one which the US Trade Representative posted earlier that month on the Internet - foreign businessmen here are sceptical that, given domestic political constraints, Washington can accept it. Hopes of a WTO agreement have slipped from optimistic to neutral. The next disappointment was the 15,000-word statement on the fourth plenum of the Communist Party's central committee that ended on September 22 and was published last week. The statement, on the future of the state sector, did not mention the role of foreign investors. It was positive for them in so far as it defines state ownership in the main sectors of the economy as meaning less than 100 per cent control, although the state must maintain a majority share. China Academy of Social Sciences economist Zhang Zuoyuan defined these sectors as those where national security is involved, like arms, printing money, and 'natural monopolies' like telecommunications, railways, power, gas, water, finance, insurance, oil, mining, steel, petrochemicals, car and construction. So what is left for the foreign investor in the mainland? 'Sometimes I believe that all China wants is our money, in the form of equity and debt,' said one consultant who has been working here for seven years. 'When they talk, for example, about 35 per cent foreign ownership in a sector, they mean stock ownership of a publicly listed company and nothing more. They do not want management or know-how. 'The advantage of this is that most of those who buy shares are passive investors. It is only foreign strategic investors who will exercise their proper rights,' he said. He cited two sectors that five years ago were thought to offer the most promising opportunities for foreign firms - telecoms and power. In both, Beijing is in the process of 'expropriating' foreign assets. Local and provincial governments closed power stations in which foreign companies hold a majority stake because demand for electricity is too low to generate the money necessary to pay back the companies under contracts that guarantee a certain rate of return. In telecoms, China Unicom has torn up contracts signed with more than 40 companies that provided more than US$1.4 billion in capital, after the government last year ruled that they were illegal. Difficult negotiations are going on between Unicom and the angry foreign firms. 'The contracts for these power and telecom deals were signed with all the necessary chops and with the full knowledge of government leaders,' the consultant said. 'But the government later decided that they were 'unequal', giving the foreign party too much benefit. 'As a result, the project finance people have all left China.' A US businessman who has worked in the mainland since 1991 was similarly downbeat. '[The retail and distribution] sector employs millions of people in China, many of them poorly educated who could not find work elsewhere. So the government will not open it up. WTO or not, it will continue to do what it does now, an unequal playing field between local and foreign competitors,' he said. Foreign firms are given restrictive licences, limiting them to one city or only one store per city, which makes economies of scale impossible. Their local rivals are given cheap land, multiple franchises and unlimited cheap finance, to expand their business and employ many people. 'If Japan, a WTO member, has been able to keep out foreign retailers, why cannot China?' he said. So he looks with scepticism at the chief executives in Shanghai, greeted with flowers by smiling girls in long red dresses, as they got off their private jets and were whisked to their hotel in limousines. 'They have to build up the China dream. In reality, it is hard to get a return. How self-deluded are they?'