China promises ‘national treatment’ for foreign firms

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Chinese Premier Wen Jiabao has committed Beijing to treating foreign companies equally to local firms, much to the relief of EU business leaders, who had expressed growing concern about the business climate in China.

Speaking in an online interview where he took questions from Internet users, Wen said the Chinese government will "provide favourable conditions" for foreign enterprises in China, who will enjoy "national treatment according to Chinese laws".

Unease had been growing in the foreign business community amid accusations that Beijing is becoming more protectionist by favouring homegrown technology companies in public procurement contracts (EURACTIV 10/12/10) and allegedly passing commercially-sensitive information from foreign firms to local competitors (EURACTIV 07/09/10).

The EU Chambers of Commerce in China (EUCCC), which had previously been scathing in criticising what it sees as a deteriorating business environment, welcomed Wen's statement.

Joerg Wuttke, president of the EUCCC, said Wen's move would alleviate concerns, provided that it is implemented.

"Among our members – and the broader foreign business community – there has been a growing mood of uncertainty in recent months about the climate for foreign enterprises in China, and particularly about market access now and in the future. As such, we warmly welcome Premier Wen's comments, which will help to alleviate these concerns," said Wuttke.

He said he hopes to hear further such assurances during the upcoming National People's Congress (NPC) – an annual gathering of legislators – which is currently in session. 

"We hope that these assurances will be translated into concrete actions that will create a more open and competitive market environment," Wuttke said.

The signals coming from Chinese lawmakers have been encouraging, according to Wuttke, who added that China's economy urgently needs to shift towards a more sustainable model driven by domestic demand.

"We believe that European companies can play a key role in this transition," he said.

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