Baseless allegation

(China Daily)
Updated: 2010-07-20 07:51
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Some foreign business leaders may have recently joined in the rising chorus of complaints regarding China's investment environment, but their allegations remain shaky so long as the fund inflow continues unabated into the country.

During a meeting with German businessmen on Saturday, Premier Wen Jiabao pointedly rebuffed allegations that China's investment environment was worsening. "I think it is untrue," Wen told the gathering in unusually strong terms.

The premier's reply may not have been diplomatic enough, but is the right and no-nonsense answer to an increasing litany of voices casting doubts on China's business climate.

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By challenging China's openness to foreign investors, the chief executives of Siemens and BASF had added heft to rising discontent among foreign businesses operating in the country. Earlier this month, it was General Electric's CEO who complained about the so-called deteriorating business environment in the world's third largest economy.

With a number of business heavyweights from developed countries speaking in one voice, it is all too natural to assume that China, the fastest-growing major economy, is now shutting out foreign investors.

Yet, the fact is that - in sharp contrast to their negative assessment about China's business climate - foreign investment in China jumped by 19.6 percent year on year during the first half of 2010.

Like GE, which saw its revenues from China touch $5.3 billion in 2009, BASF and Siemens too had combined sales in the greater China region of more than 9 billion euros ($11.6 billion) last year.

The notable increase in foreign funds that the nation has been absorbing surely indicates that foreign investors still swear by the opportunities China's consumption boom is offering, notwithstanding what these major corporate honchos are saying.

It may be true that some multinationals in China are experiencing more headwinds than before as domestic firms compete forcefully and super-national favorable treatment is phased out gradually.

Treating all companies alike, be they foreign-funded, joint ventures or joint stock enterprises, is the surest indicator that there is no protectionism afoot in Chinese investment circles.

(China Daily 07/20/2010 page8)