On 4 July Gilbert was invited by Caijing (probably the most open news medium in China) to join the Summit in China World.

Pictured are among others Li Rongrong (Chairman of SASAC) and Liu Chuanzhi, Chairman of Legend Holdings Ltd (mother company of Lenovo).
Much of the talking was of course on the economy, stimulus plan etc. The usual.
As for the topic “Cooperation and responsibilities of Transnational Companies”, of course the Chinese side requested the MNC (or you prefer here, the TNC) to “invest more in China, not to fire people, to do more R&D, to be involved in CSR”.
We all can agree on that – as long as MNC (and all other foreign companies in China” are protected for their IPR and have fair market access as a “domestic enterprise”. The EUCCC remains positive, see here the latest:
PRESS RELEASE (EUCCC)
European Chamber welcomes Premier Wen’s statement on maintaining an open market environment in China
Beijing, 3rd July, 2009. The President of the European Union Chamber of Commerce in China, Joerg Wuttke, in an address this afternoon to the Main Forum of the Global Think Tank Summit in Beijing, hailed recent comments by Chinese Premier Wen Jiabao that underline China’s commitment to maintaining an open market environment.
Said Mr. Wuttke: “We welcome Premier Wen’s strong statement on the 25th of June that China will not discriminate against foreign enterprises or products. European businesses in China hope to see more concrete measures to ensure this position will be well implemented across the board.”
In his remarks, Mr. Wuttke also noted that European businesses in China are eager to see a quick and comprehensive conclusion of the Doha round of WTO talks.
“We need a signal that the world is moving on, and that a stronger WTO mechanism is being put in place,” he stated.
The inaugural session of the Global Think Tank Summit opened in Beijing on Thursday and will run until Saturday evening. The event, which is organized by the China Center for International Economic Exchanges (CCIEE), brings together political and business leaders from China and around the world to discuss remedies for the global financial crisis and the future development of the world economy.

The comments from the EUCCC for sure made waves. Premier Wen Jiabao tried to convince Ms. Merkel all is well over here (see earlier entry).
Now on 26 June 2009 People’s Daily Online reported:
“Ministries: China to treat domestic, foreign products equally:
Regarding China’s efforts on securing fair implementation of the bidding system in government procurement projects as trade protectionism is a misunderstanding. Actually products made by foreign-funded enterprises in China are treated as China made products. China will continue to keep its commitments on its opening-up policy and will never take any discriminative measures against foreign companies or products.
Those remarks were made by Yao Jian, spokesperson of the Ministry of Commerce, and Li Pumin, spokesperson of the National Development and Reform Commission, in their joint statement on June 26.”
and on 2 July China Daily reported:
“On June 4, nine Chinese ministries jointly clarified their stance on the issue, saying there was no harm in buying domestic products, as the wind power project is part of government procurement, and not part of the 4-trillion-yuan stimulus package.” (note: this is wrong – not a case of government procurement, read the Law!)
“Last Friday, the Ministry of Commerce said on its website that China sticks to the principle of treating foreign and domestic products on equal terms when it comes to stimulus-financed projects, and foreign enterprises have already benefited from the package.
All nice promises but it remains to be seen if except for Mofcom anybody else will actually follow the instructions. Past experience shows – NO. But let’s hope that this time, words will be followed by action.
Otherwise, attracting more foreigners to set up factories here will be more difficult. Initial comments from Mofcom were kinda real dumb:
“Foreign factories here in China should know there are other markets than China”. Oops. So, you mean, we should close our factories in Europe, put them here to export to the EU and other markets and have little access to the Chinese market?. Seems Mofcom understood (?) the faux-pas and tiptoed back. At least in words.
As with the pathetic Green Dam stuff, wait and see.
The proof is in the pudding.
Optimism is not yet guaranteed.

Foreign companies in China are often discriminated in tenders where “genuine” Chinese companies are either exclusively invited or favored through all kind of tricks. Those are issues monitored by the European Chamber, through the Working Group I chair.
When authorities – often due to pressure from the central government – want to have only “real” Chinese companies, tenders are quickly announced on an obscure website or newspaper and if “foreign suppliers” show up they are told not to bother to bid as they will not be considered. Even if they do, the tender evaluation process can be easily manipulated.
Of course, difficult to prove as there is no trace on paper and foreign companies are warned not to protest unless they want to be blacklisted forever.
Now, the important point is that Wholly Owned Foreign Enterprises and Joint Ventures:
– are legally CHINESE entities;
– manufacture in most cases their products with a major local content (e.g. over 70%) – the case of wind power turbines;
– the foreign JV, in critical sectors, are minority owned by foreigners;
– have transferred their technologies at least in part to China;
– employ local workers (few expats) and pay their taxes (unlike the Chinese companies).
But the Chinese look “who is behind’ – if foreigners, forget it.
In the USA, States defend Japanese car companies as they provide local employment and are as American as Ford. Forget about that in China.
Recently the central government (e.g. NDRC) has strongly reacted to comments from the European Chamber that European windmill manufacturers have been excluded from tenders and are losing nearly all projects. The authorities claim “their windmills are too expensive” – nonsense – the EU companies could not even submit a price.
Authorities also claim the poor “domestic enterprises are discriminated in favor of imports”. Other complete nonsense. The cases we fight for are not imports but are locally produced.
The attitude and comments from the Chinese government are blatant lies and nonsense. Just a few days ago:
“Chinese Premier Wen Jiabao says cooperation between China and Germany has been developing smoothly in a variety of fields. He makes the remark during a telephone conversation with German Chancellor Angela Merkel in which the two leaders also discuss bilateral ties and other issues of common concern. He says the two sides should continue to handle their relations from a strategic and long-term perspective and keep up high-level exchanges. He says China would never discriminate against foreign enterprises or products. (Source: http://finance.qq.com)”
As I say, is equal to the announcement that “in China the Internet is free”. As pathetic.
With the world economic crisis, China was the first to go around the world and preach “against trade barriers”, like against the “Buy America” initiative – one that is by far much less of a trade barrier than China is erecting SINCE LONG.
It should be noted that many of the “big contracts” foreign companies get here are often misleading. The companies actually source most of the content on the local market.
So, if Foreign Direct Investment is falling, let it fall. Why should foreigners transfer technology and invest in factories when they are later on excluded from the domestic market?
In the case of the wind turbines it is all too clear:
– Chinese manufacturers are still behind foreign ones despite all their blatant efforts to copy and re-engineer foreign technology;
– the wind power market is very big, so China regards this as strategic and local companies should take the major market share at all cost;
– never mind quality and total life cycle cost;
– when China regards something as “important”, there are no more laws, no fair trade, just daylight robbery of technology and market share;
– “foreigners” doing (too) well in China is unacceptable.
China has killed many industries in the West. Of course, blame here the MNC who make big money through sourcing so much in China, seduce the consumers and make them dependent on cheap goods. Not all is bad – it can be good for the consumer up to a certain point.
But with the world economy still in a bad shape (ask Warren Buffett), we can expect the USA and EU to stop swallowing it all from China. On the other hand, the West has not much leverage and has only itself to blame (first being the U.S. – financed by China).
Anyway, it could be a rough ride.
[disclaimer: Gilbert Van Kerckhove is chair of the Public Procurement Working Group of the EUCCC – views expressed here are his own]