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Report: How best to invest overseas

By Jiang Wei (China Daily)
Updated: 2006-03-31 06:56
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Ministry of Commerce is due to release a foreign market access report today, explaining the trade and investment environment for Chinese firms in the nation's 25 major trading partners.

The annual report reflects the Chinese Government's concerns about the international trade environment and overseas investment, said Wang Shichun, director with the ministry's Bureau of Fair Trade for Imports and Exports.

The report aims to help domestic companies trade and invest abroad explaining such things as technical standards, quarantine and quality inspections and intellectual property rights. It also looks at customs procedures, environmental protection and labour standards that major trading partners at times use as trade barriers against Chinese exports and investment.

This year's report highlights trading partners' legislation and management mechanisms concerning foreign trade and investment as well as changes in legislation overseas.

Wang said that since China's trade volume and outbound investment have reached new heights, Chinese firms have encountered an increasing number of trade barriers overseas.

He predicted that Chinese enterprises would, over time, face a critical trade and investment environment abroad.

"About 1,700 revised technical standards, quarantine and quality inspections are scheduled to be implemented by World Trade Organization (WTO) members this year," Wang said. "Most of them will affect Chinese products."

The impact of trade barriers on China's exports has spread to more companies, including some which produce high added-value products. Disputes concerning intellectual property rights are rife.

The United States launched seven investigations last year concerning intellectual property rights protection in China. Chinese products including textiles, shoes, steel and cars are facing mounting risks of foreign curbs.

A total of 63 trade remedies were initiated against Chinese exports last year, with the associated products worth US$2.1 billion.

Cases launched by the United States and the European Union accounted for 70 per cent of the total value.

Anti-dumping charges accounted for 80 per cent, or 51 cases, of all the trade remedy cases.

Today's report is the fourth of its kind to be issued by the ministry with this year's edition also including Algeria, Kenya and Kazakstan.

The 25 trading partners in the report account for over 70 per cent of China's total foreign trade last year.

The report points to 510 trade and investment problems while the first edition of the report in 2003 put forward 250.

Other large economies, such as the United States, the European Union, Japan, South Korea and Canada have been compiling such reports for a couple of decades.

Wang said the report also helped eliminate some problems. For example, in 2004 the report touched on Japan's import quotas on dried laver (a kind of vegetation).

China later held its first investigation against overseas trade barriers and held talks with the Japanese Government on the legitimacy of laver imports.

Later in 2004 Japan agreed to lift its bar against Chinese laver.

The 2005 report continued to follow the case, not only explaining the process of the investigation but also pointing out remaining problems.

So far, Japan has nearly doubled the number of quotas to Chinese laver growers, to 230 million.

Wang called on domestic companies and industrial associations to report to the ministry any barriers or unfair treatment they meet overseas, in a bid to broaden the way the government collects information.

He said industrial associations, which had a better understanding of the situation, should play a bigger role in the campaign against trade barriers.

"Meanwhile, we hope they (firms and associations) can give analyses and proposals for resolving problems," Wang said.

(China Daily 03/31/2006 page9)