China Won’t Force Technology Transfers, Commerce Minister Says

China won’t force foreign companies to transfer technology to ventures with their local partners in order to gain access to markets in the world’s second-largest economy, Commerce Minister Chen Deming said.

“The Chinese government is committed to the policy of reform and opening up and welcomes and encourages, as always, foreign investment,” Chen said in a written response to questions from Bloomberg News. “Technology transfer and technology cooperation shall be decided by businesses independently and will not be used by the Chinese government as a pre-condition for market access.”

The U.S. and other Chinese trading partners have increased criticism of the nation’s investment policies. President Barack Obama said in his State of the Union address last month that he will create a trade enforcement unit to investigate unfair trade practices in countries including China.

Restrictions and “interventionist policies” on issues such as intellectual property rights remain a concern for American companies operating in China, Claire Reade, the U.S. trade official in charge of China affairs, said in December testimony to Congress.

Canadian Prime Minister Stephen Harper, visiting Beijing this week, said he spoke to Premier Wen Jiabao yesterday about specific cases where Canadian investments weren’t being approved.

Foreign-Trade Laws

In an English translation of his comments provided by the Ministry of Commerce, Chen said that China reviewed all its laws governing foreign trade and economic issues shortly after joining the World Trade Organization in 2001 and “revised those not conforming to WTO rules and its accession commitments.”

The commerce minister’s comments were made ahead of Vice President Xi Jinping’s visit the U.S. next week. Xi is seen by analysts including Chinese University of Hong Kong Adjunct Professor Willy Wo-Lap Lam as the likely successor to President Hu Jintao.

“As the financial crisis is spreading and worsening, all countries are faced with the task of promoting economic growth and creating more jobs,” Chen said. Stronger cooperation between the U.S. and China is in the fundamental interest of both nations, he said.

--John Liu. Editors: Nerys Avery, Scott Lanman

To contact Bloomberg News staff on this story: John Liu in Beijing at jliu42@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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