Ananth Krishnan

Any rule should be fairly applicable to all companies including Indian, Chinese and western

BEIJING: China's Commerce Ministry on Monday called on India to provide an “open, fair and transparent” investment environment, in its first response to the reported restrictions on the import of Chinese telecom equipment.

“We hope that policies to be launched should be fair to all enterprises, and should not discriminate against Chinese enterprises,” spokesperson Yao Jian said at a press conference on Monday. “Any rule should be fairly applicable to all companies including Indian, Chinese and western companies.”

The reported ban on the import of equipment made by Chinese telecom giants Huawei and ZTE in light of security concerns has, in recent weeks, strained relations between the two countries, even as bilateral trade has rebounded following a slump last year. The Chinese government has, so far, responded cautiously to the restrictions. On Monday, the Commerce Ministry stopped short of directly criticising the moves, in a marked contrast to its strong reactions to anti-dumping investigations initiated by India last year.

“We hope the two nations increase consultations and cooperation to address problems,” Mr. Yao said, urging India to allow existing contracts secured by Chinese companies to proceed and to carry out investigations “according to international rules.” “The investment by Indian firms in China is larger than Chinese firms' investment in India,” he added, arguing that China had “created a very good service and investment environment for foreign investment.''

Many Indian and foreign companies based here, however, have in recent months begun to increasingly voice concerns over China's policies towards foreign firms, pointing to long-standing rules requiring foreign firms to enter into joint ventures with local partners and recently introduced procurement policies favouring domestic enterprises.

The Commerce Ministry's first comments on the telecom issue come shortly after representatives from Huawei and ZTE met with Home Ministry officials in New Delhi. The companies have been given one month to disclose information over their ownership structures, according to reports.

The Home Ministry has expressed concerns over the possibility of malware being embedded in telecom equipment. Officials have stressed that the import bans were not country-specific, and were only applied on a company-by-company basis. Even as the Chinese government adopted a measured tone in its response to the latest trade spat between the countries, articles in its official media and industry groups have strongly criticised the restrictions, accusing India of disguising “protectionist” measures as security concerns. An official commentary issued on state-run Xinhua news agency on Monday, shortly after Mr. Yao's comments, accused India of employing “political assertions” to justify “economic excuses.” “It is just part of many absurd political assertions India has made during the last few years as it wanted to keep competitive Chinese products out of its market and to protect its domestic industries,” it said. “Protectionist measures by India not only hurt Chinese companies, they could also have a negative impact on overall Sino-Indian relations.”