BEIJING (XFN-ASIA) - The European Union is open to 'responsible investment' from China Investment Corp (CIC), EU Trade Commissioner Peter Mandelson said ahead of a meeting with Lou Jiwei, chairman of the 200 bln usd sovereign wealth fund.
'China has always acted in an objective and responsible way through the use of its sovereign wealth, and I will be indicating to Lou Jiwei that we expect that to continue and we will welcome Chinese investment on that basis,' Mandelson told reporters in Beijing.
'We welcome China's stake in the international financial system, we want it to be maintained and we are happy for it to grow,' he said.
CIC was launched in September 2007 to manage part of China's foreign reserves. Its overseas investments include a 9.9 pct stake in Morgan Stanley and a holding in US private equity firm Blackstone.
Mandelson also reiterated the need for openness and the strengthening of ties between the EU and China, particularly amid the current turmoil in the world's financial markets.
'I am coming to China with a very simple message, namely that openness, trust and cooperation will help us weather the current storm in our economy and become stronger for it. The world's financial system has become so interlocked, so interdependent, that we all have a stake in its success,' he said.
'While I understand the voices saying 'let's disengage,' I say those voices are wrong and I hope China does not listen to those voices. China is now a key player in the global economy and in its financial system, China needs to keep playing its hand and playing it smartly,' he added.
But he also called on Beijing to further open up to foreign investment, and added that more needs to be done in areas such as the protection of intellectual property rights (IPR).
'In Europe our markets are open for business and investment, they're not protectionist, we don't create artificial barriers or obstacles to the import of Chinese goods and services, but the same is not the case on the Chinese side,' Mandelson said.
'Sometimes (European industry's) patience is tested ... by regulation that discriminates against foreigners through the use of standards, bureaucratic hurdles, the abuse of monopolistic positions by Chinese companies in certain markets, the abuse of IPR and forced technology transfer,' he said.
To build further trust and confidence, China and the EU should prioritize balanced and reciprocal investment, while also stepping up cooperation in environmentally-friendly trade, Mandelson added.
'We need to ensure that the rules of engagement on investment between the EU and China are balanced and reciprocal, and secondly we need to focus especially on trade in environmental goods, services and technologies and building a low carbon economy,' he said.
Mandelson is meeting senior Chinese officials over a four day visit, and he will attend the World Economic Forum in Tianjin this weekend.
will.davies@afxasia.com - xfnap/xfntm COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2008 AFX News
