Google's possible exit will not change China's investment environment

13:32, March 23, 2010      

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Google's threat to exit China has led some people to hastily conclude that China's investment environment for foreign-funded enterprises is worsening.

However, they should not be prejudiced by an individual case but see the broader picture that China remains one of the best investment destinations in the world.

Just as China's Foreign Ministry spokesman Qin Gang said last week,Google's possible withdrawal is only an individual business act, which would not affect China's investment environment or change the reality that most of the foreign enterprises, American companies included, have been doing well and making profits in China.

There are 660,000 foreign-funded enterprises tapping a booming market in China and Google is only one of the 480 Fortune 500 firms reaping the fruits of China's near-double-digit economic growth.

Even if Google's threat materializes, what would change is not China but Google itself -- China would continue to adhere to its policy of reform and opening up, but Google would lose the business opportunities offered by China's 384 million Internet users and be remembered for backtracking on its promises.

On entering the Chinese market four years ago, Google clearly stated that it would respect Chinese law. And, no country allows unrestricted flow on the Internet of pornographic, violent content, or content posing threats to a nation's security and unity.

Since announcing in January that China-based cyber attacks had targeted its databases and email accounts, Google has provided no sound evidences to support the claim.

It is groundless to accuse China of creating headaches for foreign investment, given one after another international brand, while often bogged down in other countries, have posted surging revenues and profits from the expanding Chinese market.

The foreign investment China actually utilized in 2009 dipped only 2.6 percent, compared with a drastic slide seen in other countries due to the global downturn. And China has overtaken Great Britain as the world's second largest receiver of foreign investment.

In addition, a new trend is emerging where an increasing number of foreign companies are expanding their presence in China, even amid the lingering effects of the global economic downturn.

China would not, by any way, allow its investment environment to worsen because it is an indispensable part of its national strategy of reform and opening up.

Absorbing foreign investment is part of China's basic national policy of opening-up, and China is committed to creating an open investment environment, said Ministry of Commerce spokesman Yao Jian last month.

China's support for open markets has been voiced repeatedly by Chinese leaders, with the latest statement coming from Chinese Premier Wen Jiabao at the press conference following the annual session of the National People's Congress on March 14.

"China welcomes foreign investors to do business in line with the Chinese laws... and we will institutionalize arrangements to provide a level playing field and ensure national treatment for foreign companies operating in China," Wen said.

Source: Xinhua
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