Confusion over what investment incentives will be offered to Hong Kong firms by the Beijing municipal government deepened yesterday after Chinese officials denied claims that SAR companies would be placed on an equal footing with local businesses before their foreign rivals. Foreign Trade and Economic Co-operation Minister Shi Guangsheng said the incentives unveiled last week did not mean there was a fundamental change in the country's foreign investment policy, Hong Kong Web site Infocast.com reported. The incentives meant instead that preferential treatment enjoyed by state-owned enterprises would be extended to private enterprises and all foreign-Beijing joint ventures, Mr Shi said. That appears to contradict last week's announcement by Beijing city officials who said Hong Kong companies involved in joint projects with mainland companies in the capital would be treated as 'local companies', entitling them to interest rate subsidies and other financial support, giving them preferential treatment over foreign businesses. Other Beijing officials also hinted Hong Kong would not receive preferential treatment. In terms of 'local enterprise' incentives, Hong Kong would not enjoy any special treatment, they said. The city would treat Hong Kong the same as other foreign investors in accordance with World Trade Organisation rules. The local enterprise deal formed part of the package announced by Beijing mayor Liu Qi last week. Mr Liu said the city would relax regulations for Hong Kong companies to coax them to invest billions of dollars in the city's massive infrastructure projects planned for the 2008 Olympic Games. The incentive package was applauded by Hong Kong's business community which said the incentives would enhance SAR investments in the city and bolster Hong Kong's declining economy. However, Hong Kong businessmen said they were confused by the statement from Mr Shi. 'I had thought the incentives, including the equal footing treatment, were designated for Hong Kong investors,' said a head of a Hong Kong company's Beijing office. He was waiting for further clarification from the Hong Kong Government. A spokesman for the SAR's Beijing office said the six incentives announced by Beijing city government remained valid. However, the office was in talks with Beijing city to get a better understanding of the 'local enterprise' treatment, she said. WTO director-general designate Supachai Panitchpakdi said yesterday the investment incentives offered to Hong Kong did not violate WTO rules as 'Hong Kong is one and the same country as China'.