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19
Jul
2010
German industrialists attack Chinese E-mail
News - China News
Written by Express
Two of Germany’s most prominent industrialists have attacked the business and investment climate in China during a meeting with Wen Jiabao, the Chinese premier. The criticism from the businessmen, the chief executives of Siemens and BASF, came against a backdrop of rising discontent among foreign businesses operating in China. The German executives’ comments were all the more striking as they were made directly to the Chinese premier, and in public, as part of Angela Merkel’s four-day state visit to the country.

Jürgen Hambrecht, chief executive of BASF, the chemical producer, hit out at restrictions on foreign business and complained of foreign companies being forced to transfer business and technological know-how to Chinese companies in exchange for market access.

“That does not exactly correspond to our views of a partnership,” Mr Hambrecht told Mr Wen at the weekend meeting in the western Chinese city of Xi’an.

Addressing government procurement practices, a recent area of complaint by foreign executives and governments, Peter Loescher, chief executive of Siemens, the industrial conglomerate, said foreign companies operating in China “expect to find equal conditions in the fields of public tenders”.

Mr Loescher (see article image above), who is also chairman of the Asia-Pacific Committee of German Business, called on Beijing rapidly to remove trade and investment restrictions in sectors such as automobiles and financial services.

BASF and Siemens had combined sales in greater China of more than €9 billion ($11.6 billion) last year and employ more than 36,000 people in the area.

Mr Wen responded to the criticism by telling Mr Hambrecht to calm down, insisting that China remained open to foreign investment and did not discriminate against foreign companies. “Currently there is an allegation that China’s investment environment is worsening. I think it is untrue,” Mr Wen said.

The Financial Times reported this month that, Jeffrey Immelt, chief executive of General Electric, complained, at a private dinner in Italy, that Beijing was becoming more protectionist and GE was experiencing its toughest business conditions in China in the past 25 years.

The German executives’ comments signaled a potential change of heart for business figures such as Mr Hambrecht who have been vocal cheerleaders for China. In 2007, he was one of the few German business leaders publicly to criticize Ms Merkel over her meeting with the Dalai Lama, the exiled Tibetan spiritual leader reviled by Beijing. He said at the time that her actions would offend China and hurt German business interests.

“Those comments went down extremely well in Beijing,” said one prominent German business executive based in China. “He has been closer to China and more of a friend to China than Jeff Immelt ever was so it is very significant he has chosen to speak out in public now.”

At the end of the talks Ms Merkel tried to put a positive spin on the encounter, saying it marked a new spirit of openness between the two countries. “In our talks we don’t beat around the bush,” she said

During the meeting in Xi’an, Ms Merkel said she was “worried” about Chinese limitations on the supply of rare earth minerals to global markets, prompting Mr Wen to say China would never block their export but that they should be sold abroad only at “a reasonable price and volume”.

China controls about 90 percent of the global supply of rare earth minerals, which are used in electronic devices, hybrid cars and military equipment.

Chinese business executives who attended the Xi’an meeting complained about German visa rules and requested an environmentally controversial dredging of the river Elbe near Hamburg to allow larger container ships to pass.


Via Express

Our valuable Editor Express has been with us since Friday, 30 July 2010.
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