China officials hit out at protectionism, reject Coke fears

TRADE WARS

China says Coke veto unlikely to affect Chinalco's Rio bid
China said Friday it was not concerned its veto of Coca-Cola's takeover bid for a juice maker would trigger an Australian rejection of a Chinese company's attempt to buy into mining giant Rio Tinto. "I'm not worried," said Chen Jian, a vice commerce minister, referring to a plan by aluminium maker Chinalco to invest 19.5 billion dollars in debt-laden mining giant Rio Tinto. "From a business point of view, the acquisition is definitely beneficial to (both sides)," he told reporters. Chen was replying to a question on whether his ministry's decision to block a Coca-Cola offer for China's top juice producer Huiyuan could lead to Australia making a similar move against Chinalco. Australia said Monday it would delay by 90 days a decision on whether to let Chinalco go ahead with the acquisition, which would double its Rio Tinto stake to 18 percent. "There is no reason to make a fuss just because (the approval) is postponed for 90 days," said Chen. He also said it did not follow that blocking Coca-Cola's acquisition would lead to retaliation by other countries. "Other nations have their own anti-monopoly laws. They can make their decisions according to the laws," he said. His ministry earlier this week vetoed Coca-Cola's 2.4-billion-dollar bid for Huiyuan, which would have been the biggest foreign takeover of a Chinese firm. China based its rejection on a new anti-monopoly law, but the decision sparked concern that growing economic nationalism in China was causing a backlash against overseas investment. Barnaby Joyce, a senator of Australia's National Party, was quoted in the Business Day Friday as saying the Coke case "signals that China is prepared to play the protectionism game but expects Australia to allow China to buy into our strategic assets."

by Staff Writers
Beijing (AFP) March 23, 2009
China hit out at trade protectionism on Monday, a day after stressing its veto of Coca-Cola's bid for a local company does not mean it is hostile to foreign investment.

Vice Finance Minister Li Yong called on the Group of 20 (G20) major economies to reject protectionism at next week's meeting in London, saying it could set back recovery from the economic slowdown.

"Protectionism will seriously dampen the momentum of economic recovery," Li told reporters.

"We call on the G20 to send a signal of opposing trade protectionism."

Li was speaking after last week's rejection of Coca-Cola's 2.4 billion dollar bid for Huiyuan Juice triggered fears that China was raising barriers to overseas companies.

Commerce Minister Chen Deming on Sunday called such worries "a very big misunderstanding" and said China was still open to foreign investment.

"It is a very big misunderstanding to construe this as a sign that China does not welcome foreign investment," said Chen, according to the Shanghai Securities News.

"We still hope Coca-Cola and Huiyuan can develop healthily in China and we welcome other companies to invest and grow in China at the same time," he said at a forum.

Chen's ministry last week vetoed the deal, which would have been the biggest foreign takeover of a Chinese firm, with reference to a new anti-monopoly law that took effect in August.

It claimed that a merger would have forced consumers to "accept higher prices and a smaller choice of products."

The decision caused jitters among overseas investors that Beijing was turning back from economic liberalism and would make it harder for foreign companies to take over Chinese companies.

But Chen called for "a distinction between China's opening-up to foreign investment and the specific market concentration case of Coca-Cola," according to the Shanghai Securities News.

Next week's G20 summit unites leaders from major developed and emerging economies including the United States, Japan, China, rich European nations, Mexico, South Korea and Saudi Arabia.

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TRADE WARS

China to be flexible at Doha talks: state media

Beijing (AFP) March 23, 2009
China will be flexible on issues at the Doha Round of global trade talks in order to help negotiations that have been stalled for years, state media said Monday.

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