“Chinese companies should not be viewed with bias”- Xi
October 18, 2015, 7:51 am

China today accounts for 10 per cent of world imports, 11.5 per cent of global GDP and 38 per cent of Asia Pacific GDP [Xinhua]

Refuting criticism that “state-subsidized, state-directed expansion of Chinese industry abroad” is unfair, Xi told Reuters in an interview on Sunday, “China’s system is different from that of Western countries”.

“The role of the Chinese government is to secure and create a favourable political environment and a fair legal framework for Chinese companies. This is what all governments are doing, and I think the Western countries are doing better than us,” the Chinese President said.

“Even under market conditions, countries support the growth of their companies in various ways, and such measures should not be all labelled as government subsidy. China’s system is different from that of Western countries. Due to historical reasons, Chinese companies perform many social functions, which are hard to measure with a simple arithmetic formula,” he added.

The Chinese central government has rolled out a specific plan for SOE reform after President Xi Jinping left the contentious issue pretty much alone in the first years of his presidency.

“China will modernize SOEs, enhance state assets management, promote mixed ownership and prevent the erosion of state assets,” said guidelines released by the Communist Party of China Central Committee and the Chinese Cabinet last month.

With $16 trillion in assets, the Chinese SOEs do everything from building spacecraft to trading silk.

Analysts have long argued that SOEs made competition unfair.

BNP Paribas data says corporate debt of China’s state owned firms rose to 167 per cent of GDP in 2014, from 97 per cent in 2008.

On Sunday, Xi also said in the Reuters interview, that while “competition is necessary for a business to grow”, Beijing hopes that “such competition is benign and market-based. There should be no swing doors or glass doors which are placed as non-economic or non-market-based barriers”.

The Chinese President also dismissed doubts about transparency in the dealings of the new China-led Asian Infrastructure Investment Bank.

“The management team will be selected through an open, transparent and merit-based process. This is a new principle not included in the constitution of existing major multilateral development banks. Another example is that the AIIB places no restriction on the procurement of goods and services from any country, and again this is not the case in the other regional multilateral development banks,” he said.

Britain is also a founding member of the AIIB.

Xi reaches London on Monday at the invitation of Queen Elizabeth II, the first state visit to the UK by a Chinese leader since 2005.

In 2014, Sino-British trade exceeded $80 billion.

China’s investment in the UK has risen at an annual rate of 71.7 per cent over the past three years.

In 2014, UK’s investment in China increased by 87.6% year-on-year, the fastest among major EU countries.

British Premier David Cameron visited China earlier this year. On a recent visit, British Finance Minister George Osborne declared Britain wanted to be China’s ‘best partner in the West.’

Xi’s state visit to UK will conclude on October 23.

TBP