China will relax restrictions on foreign ownership of domestic firms and treat Chinese and foreign companies on an equal basis, premier Li Keqiang said yesterday.
Li, speaking at the World Economic Forum’s annual “Summer Davos” in Dalian, China, announced the country would further open up its markets to encourage foreign investment.
During a panel discussion on technology and innovation, global business leaders raised concerns about firms' access to China, with foreign firms reporting difficulty conducting business there and complaining Chinese companies got preferential treatment.
Alex Molinaroli, chairman and CEO of Johnson Controls, said the access foreign firms would have would likely be limited.
“What you have to remember is that the Chinese market is open but open in a way to serve what the Chinese market requires, so I think there’s a different level of openness depending on the technology, depending on what’s required,” he said.
The premier denied the criticism and said both domestic and foreign companies would enjoy the same policy support when doing business in China. To make it easier for foreigners to set up enterprises, China would test a process whereby Chinese and foreign companies could register at the same “window”.
“All companies registered in China will be eligible to enjoy the same supportive policies that China offers in accordance with World Trade Organization rules to push forward the Made in China 2025 strategy and promote technological innovation,” he said.
The Made in China 2025 project is an initiative to comprehensively upgrade Chinese industry and transform China into a leading manufacturing power.
When pressed by Molinaroli about reported forced technology transfers under a law that requires foreign manufacturers to disclose and transfer technology to their joint Chinese venture partners, Li clarified that there would be no compulsory technology transfer obligations.
“The government will not allow Chinese companies to compel foreign partners to transfer technologies or infringe on intellectual property rights … cooperation should be voluntary and to the benefit of exploring the Chinese market,” he said.
Li said the government would also encourage foreign companies to use profits from the Chinese market to invest back into China but they could choose to take their profits out of China without restriction.
“Foreign-funded firms, I believe, will reap generous profit if [they] reinvest what [they] earned here in China,” he said.
He added that the Chinese economy, with its steady, long-term growth and “gradual openness”, would generate more opportunities for other countries, making it the most attractive destination for investment.
☛ Want to stay up to date with the news? Sign up to our daily bulletin.