China to ease curbs on foreign investment after complaints

Markets Associated Press

The Chinese government said Friday it will ease restrictions on foreign investment in sectors ranging from banking and internet services to rail equipment and motorcycles, in response to mounting complaints from foreign business groups and governments.

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An official with China's National Development and Reform Commission, the economic planning agency, said service sectors such as accounting and auditing, architectural design and ratings services will be open to foreign investment.

In manufacturing, barriers to foreign investment will be lowered in sectors such as rail transportation, motorcycles and ethanol fuels, according to an official transcript of a briefing by Ning Jizhe, vice-chairman of the commission.

The moves are part of a set of guidelines approved by China's Cabinet this week Beijing says are aimed at leveling the playing field for foreign companies and boosting investment, which has been slowing. No specific details were immediately released.

Ning said the guidelines would "help ensure and promote fair competition between domestic and foreign companies" and attract more investment. He said foreign investment in China rose 3.9 percent from January to November, slower than the rate of growth in the previous year.

China would also work to open up areas typically deemed sensitive by the government, such as internet services, telecoms and education, in "an orderly way," Ning said. But the extent to which such sectors would be liberalized was unclear. Earlier this year, China passed a law on cybersecurity seen as enabling the ruling Communist Party to exert greater control over the internet and technology products and moved to more tightly control schools.

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Premier Li Keqiang, who chaired the State Council's executive meeting that passed the guidelines Wednesday, said China should take measures with "great effectiveness in attracting foreign capital," according to the official Xinhua News Agency.

"China's economy develops as we continue our opening-up strategy," Li was quoted as saying. "Besides advanced technology and experience in management, China also needs capital investment from overseas."

The Chinese leadership is trying to shore up economic growth which has cooled steadily over the past six years as communist leaders try to steer it to more self-sustaining growth based on consumer spending instead of trade and investment.

Washington and Europe complain Beijing blocks access to its markets in violation of its free-trade commitments. Foreign companies complain Chinese regulators are trying to squeeze them out of technology and other promising industries. In an interview with a Hong Kong newspaper published last week, the German ambassador to China said that Beijing was not living up to pledges to open its markets and give unfettered access to foreign investment.

"We sense a growing tendency in China towards market closure and favoring of indigenous production," Ambassador Michael Clauss told the South China Morning Post.