Economy

Foreign firms are welcome in China

By Ding Qingfen (China Daily)
Updated: 2010-04-06 07:05

Tong Zhiguang said he believes the government is taking a more active and open attitude toward foreign investment.

BEIJING: Foreign businesses in China are operating in an improving and maturing environment, with the government committed to its World Trade Organization (WTO) pledges, a former top trade negotiator has said.

"It's just not true to say that China is getting tougher with multinationals doing business in the country," Tong Zhiguang, who is also a former vice-minister of commerce, told China Daily on Monday.

"Instead, I believe the Chinese government is taking a more active and open attitude toward foreign investment in terms of the policies concerned," China's former WTO chief negotiator said.

Tong made the remarks in response to complaints by a number of international companies about more business restrictions in China.

These complaints flared up after Internet search giant Google withdrew its operations from the Chinese mainland last month.

Last Friday, the American Chamber of Commerce in Beijing (Amcham-China) also released a 2010 Business Climate Survey which alleged growing dissatisfaction from tougher requirements by the Chinese government, fiercer competition and unequal treatment.

Previous complaints from Amcham-China focused on new, indigenous innovation rules favoring domestic business and government procurement policies that exclude foreigners from China.

But China will stick to its policies on foreign capital, Vice-Minister of Commerce Chen Jian said March 26.

The recent cases involving foreign business operations such as Google and mining giant Rio Tinto will also not hurt the nation's investment environment, Chen said.

Tong said "it's absolutely unreasonable to politicize these individual cases".

Restrictions and regulations for foreign businesses in China are in place, "but they are international practices", said Li Xiaogang, director of the Foreign Investment Research Center at the Shanghai Academy of Social Sciences.

"Fundamentally, the business environment for international firms are getting better," Li said.

According to the United Nations Conference on Trade and Development, China is still the most attractive destination for foreign investment in 2010.

"I believe Google is an exceptional case. China is one of the top three priorities for PepsiCo, if not the top priority. And there is no question that China is where all internationals realize is critical for their global economic growth," Ken Newell, president of PepsiCo Greater China Region (Beverage), told China Daily.

The beverage giant has 22 plants operating in China and it plans to have 14 more in the next few years, with a majority of these in the western and northern regions, in line with the country's "go west" strategy.

"There is no change with China's support for foreign investment. That is why our commitment to the market is growing," said Sui Chenghao, China managing director of Merck Serono, a subsidiary of leading pharmaceutical company Merck KGaA.

Merck Serono recently announced an investment of 300 million yuan ($44 million) in China.

The Chinese government is trying to send a more welcome message to foreign businesses despite a number of loopholes in policy that have dampened the confidence of some of them, said Wang Zhile, director of the research center on transnational corporations under the Ministry of Commerce.

"The mainstream policy is positive and has remained unchanged," he said.

Contrary to Amcham-China's latest report, a survey by the American Chamber of Commerce in Shanghai (Amcham-Shanghai) in March also showed a strikingly positive attitude among businesses in the city.