India bid to block investment will sour ties:China

Accusing India and US of following protectionist policies, China said any attempt to politicise outbound investments by Chinese firms or "abuse" investment protection tools to protect domestic industries would hurt ties.

Beijing: Accusing India and the US of
following protectionist policies, China today said any attempt
to politicise outbound investments by Chinese firms or "abuse"
investment protection tools to protect domestic industries
would hurt bilateral ties.

Naming India and the US among other countries, the
Chinese Commerce Ministry spokesman Yao Jian said that such
abuse will sour trade and investment relations with China, as
well as dampen the confidence of the country`s outbound direct
investment (ODI).

Apparently pointing to media reports that India had
blacklisted 25 Chinese telecommunications providers over
security concerns and banned Indian operators from Chinese
purchases, Jian said there should be no misuse of trade
protectionist measure in the name of national security.

"On the one hand, Chinese enterprises are encouraged to
actively adjust themselves to the changing environment
overseas, but on the other hand, we strongly call for some
individual nations and regions not to abuse trade and
investment measures against China, citing national security
excuses," Yao was quoted today by state run China Daily.

"We don`t think it is appropriate for them to politicise
common commercial investment cases, which will hurt bilateral
relations with China," he said.

China`s ODI surged 24 per cent from a year earlier, to
USD 55.18 billion during the first six months this year,
according to new figures.

The investment mainly went to sectors such as mining,
commercial services, manufacturing, wholesale and retail.
Despite the rapid growth of China`s ODI, Chinese
investment abroad has been frequently blocked by other
countries, especially the US and India, during the past few
months, according to the Daily.

It also said that the US Congressional Steel Caucus wrote
to Treasury Secretary Timothy Geithner last month asking the
Obama administration to obstruct the USD 175 million
investment proposal by Anshan Iron and Steel Group
Corporation, China`s leading steel producer, in a US rebar

"The financial crisis has provided Chinese enterprises
with a nice opportunity to expand and invest overseas, at a
comparatively lower price," ministry spokesperson Yao said.
On the criticism about restrictions on foreign investment
in China, he said, "Loopholes do exist with China`s FDI
policies, but it is undeniable that the Chinese government is
much willing to listen to suggestions from all sources and we
are also trying to improve the environment," Yo said .

"I don`t think there is any other country that could
create a better environment for foreign businesses than China.


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