China seeks to allay foreign business worries

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Vice President Xi Jinping reassured overseas firms on Tuesday that China will treat them fairly and is committed to becoming the world's most attractive destination for foreign investment.

The European Union's foreign policy chief, Catherine Ashton, raised worries about the difficulty of doing business in China during a meeting last Thursday with Premier Wen Jiabao.

It was the latest in a series of complaints by foreign politicians and executives that China is not opening up its market as promised when it joined the World Trade Organisation in 2001.

Foreign businessmen were particularly angry at draft Chinese rules issued last year that would have required government entities to prioritise "indigenous innovation" in public procurement.

Speaking at an investment forum in the southeastern coastal city of Xiamen, Xi affirmed that Beijing has revised the regulations and will treat foreign firms on the same basis as local companies.

"We have adjusted our definition of indigenous innovation and confirm that foreign businesses are part of China's manufacturing force," Xi told an audience of foreign government officials and business executives.

Xi, expected to succeed Hu Jintao as head of the Communist Party in 2012, said Beijing was in serious talks to join the WTO's government procurement accord, which enshrines equal access to bidding on public-sector tenders.

Foreign firms generate 28% of China's industrial output and employ 45 million people, he noted.

"As China opens wider, foreign investors will enjoy more scope for development and richer returns," he said.

The China Business News reported on Tuesday that Beijing had agreed in principle to allow wholly foreign-owned hospitals in China.

Meanwhile, Beijing will encourage its own firms to venture abroad and build themselves into top multinational companies, Xi said.