China Promises Level Playing Field for Foreign Businesses
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Chinese President Xi Jinping has promised to protect the interests of foreign companies in China amid rising concern among global firms about discriminatory policies and complicated bureaucratic processes that hurt their businesses in the country.
In a rare audience with the head of the ruling Communist Party, global business leaders at the Bo’ao Forum on Monday appealed to Xi to reduce barriers and restrictions on investment that favour Chinese state firms as well as to end outright discrimination against foreign firms.
Chinese President Xi Jinping has promised to protect the interests of foreign companies in China amid rising concern among global firms about discriminatory policies and complicated bureaucratic processes that hurt their businesses in the country.
In a rare audience with the head of the ruling Communist Party, global business leaders at the Bo’ao Forum on Monday appealed to Xi to reduce barriers and restrictions on investment that favour Chinese state firms as well as to end outright discrimination against foreign firms.
Though their investment has helped drive and modernise China’s economy, foreign businesses often complain their interests have been neglected by the authorities in the past decade.
Speaking at the roundtable discussion, PepsiCo president Zein Abdalla, who said he spoke for the U.S. business community, called for fairer treatment and urged China to “reduce barriers to entry in various industries, including agriculture.” He added that continued investment by American companies would depend on how far ahead Beijing gets with its market reforms.
A recent survey conducted by the American Chamber of Commerce in China found that 78 percent of businesses were optimistic when asked to describe their two-year outlook but the percentage which see improvements in the investment environment fell to 28 percent this year from 43 percent in 2012.
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Responding to the various feedback from international business leaders, Xi stressed that China was committed to improving the business climate for investors.
“We will protect the lawful rights and interests of foreign-invested companies in accordance with [the] law, and ensure their rights to equal participation in government procurement and independent innovation,” Xi said on Monday.
“China will never close its door to the outside world,” he said. “Now that we have opened this door we will not close it, not for now and not in the future.”
The president also said China will work to improve its legal system, so that all enterprises will be on an equal footing. “China’s market environment will be fairer and more attractive,” he said.
Davide Cucino, president of the EU Chamber of Commerce in China, said his group welcomed Xi’s comments, but added that “we have heard similar words from previous leaders in recent years while the market access environment in China has not noticeably improved for foreign companies”.
Xi’s meeting with the heads of companies that included Volvo, Unilever, Samsung and Sumitomo was itself quite symbolic and a departure from the practice of Xi’s predecessor Hu Jintao, who rarely met foreign business leaders in public.
Since formally assuming power in March, Xi has employed a more direct, plain-speaking style to appeal to the public, talking about the need for the Chinese leadership to curb corruption. Most of his comments on Monday seemed aimed at mollifying foreign investors and presenting a business-friendly image of his new administration.
On Monday, Xi also said China’s economy would continue to grow rapidly in the years to come but cautioned that the days of “ultra-high speed growth” were over and no longer desirable. He added that the slower pace of growth would help China rebalance its economy towards a consumption-led model rather than an export-driven model, something Beijing has been trying to achieve for years.
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