Experts: Locke's 'Headaches' allegation groundless

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China remains one of the world's best investment destinations and there is no discrimination against foreign enterprises in China, experts said Wednesday.

Zhao Jinping, a researcher with the Development Research Center of the State Council, made the remarks after U.S. Commerce Secretary Gary Locke said China had created "headaches" for U.S. companies.

U.S. companies face too many obstacles doing business in China, Locke said in a speech to the U.S.-China Business Council's annual forecast conference on Jan. 28.

The fact is that foreign enterprises have been enjoying preferential policies for a long time, including tax cuts and easy land lease approval, according to Zhao.

"The foreign direct investment (FDI) China received dipped only 2 percent last year, compared with a drastic slide seen in other countries due to the global downturn. That proves China offers a favorable investment environment," Zhao said.

He also noted a new trend where an increasing number of foreign companies are expanding their presence in China - even amid the lingering effects of the global economic downturn - with more than 440 of the Fortune 500 companies expanding their businesses in China.

This trend is best embodied by U.S.-based Applied Materials, the world's largest supplier of manufacturing systems and related services to the global semiconductor industry.

The company last month posted its executive vice president, Mark Pinto, in Beijing, to enable closer contact with key customers, Pinto said in January.

In fact, Locke's comments come amid concern about the congressional mid-term elections to be held late fall, Robert Kuhn, an international investment banker and author of a series of books about China, said in an email.

"While needing to do more to reduce market access asymmetries, China is certainly open to foreign investment, much more than in the past and increasingly so in diverse industries," said Kuhn, whose latest book, "How China's Leaders Think," has been published in Chinese.

Locke also criticized a Chinese government plan to promote domestic innovation by giving preference to Chinese companies using indigenous intellectual property on bids for government procurement contracts.

"The criticism is unfair," said Zhang Yansheng, director of the Institute of Foreign Trade under the National Development and Reform Commission, on Wednesday.

Zhang pointed to the "Buy American" provisions in the Obama administration's American Recovery and Reinvestment Act unveiled in 2009, which requires the use of U.S.-made steel, iron and manufactured goods in public works projects and orders the Department of Homeland Security to purchase U.S.-manufactured textile and apparel goods.

"The U.S. is applying double standards. It's all right for it to favor domestic products but not for other countries. Actually, measures in favor of domestic products in government procurement projects are common in many countries," Zhao said.

In addition to the above-mentioned facts, China's adherence to its national strategy of reform and opening-up debunks Locke's assertions.

Absorbing foreign investment is part of China's basic national policy of opening-up, and China is committed to creating an open investment environment, said Ministry of Commerce spokesman Yao Jian on Monday.

China's support for free trade and open markets has been voiced repeatedly by Chinese leaders, with the latest statement coming from Chinese Vice Premier Li Keqiang himself at Davos last Friday.

China will continue to promote trade and investment liberalization and facilitation, and work for more open international markets, Li said at the World Economic Forum's annual meeting.

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