Beijing - Beijing has urged Washington to provide a "more transparent and fairer" investment environment for Chinese companies in the United States, and to accept China's market economy status (MES) as early as possible, Chinese Commerce Minister Chen Deming said on Monday.

Chen also said China has "sincerity and determination" in protecting intellectual property rights (IPR), and believes that IPR protection is the "precondition" to foreign investment flow into China.

Chen made the remarks during a press conference of the second round of the China-US Strategic and Economic Dialogue, which opened in Beijing on Monday.

"China hopes the United States can facilitate Chinese companies' investment in the US by increasing the transparency and predictability of its foreign investment policies and relevant laws," Chen said.

All Chinese companies that invest or have interests in investing in the US currently face possible accusations of being controlled by the Chinese government, he said.

Chen also said "the two sides failed to reach a consensus on China's MES during yesterday's dialogue, but discussion of the issue will be continued in future meetings".

As a precondition to entering the World Trade Organization in 2001, China accepted some restrictive clauses, one of which was that its market economy status could not be automatically granted worldwide until 2016.

More than two-thirds of all countries have accepted China's MES, but developed nations including the US and Europe refuse to do so. This has been the major source of frequent trade remedy cases against China launched by the developed nations.

The "earlier Washington accepts China's market economy status, the more benefits it will get from the bilateral trade", Chen said.

Despite the efforts that Chinese government has made in persuading the US and EU to grant China the MES, experts said there is little possibility that they will do so before 2016.

"China reckons that granting its MES should be judged on whether its resource allocation is deemed to be market-oriented," he said.

There are "various standards" on measuring the MES and they are "variable, multiple, and should keep up with the times", he said.

IPR protection

China has realized that "IPR protection is an important premise for helping it to attract foreign direct investment (FDI)", Chen said.

Last year, China's FDI totaled $90 billion, down by 2.6 percent over 2008, while global FDI on average declined by 30 percent during the same period. During the first four months, FDI increased 11.28 percent compared to the same period of last year, according to the Ministry of Commerce.

"The rising FDI showed that foreign investors look positively on China's efforts in IPR protection, which has been embedded in China's national strategy," Chen said.

China has unveiled more than 1,000 relevant policies and methods to promote IPR protection during the past five years.

Given the technology and management challenges, IPR protection is a tough issue for all nations, Chen said. China still faces a lack of effort in IPR protection in some specific regions and industries, and it hopes to improve the situation by studying more cases provided by the US, Chen said.

"There is no doubt that China is sincere and determined in this regard," he said.

China Daily

(China Daily 05/25/2010 page3)