Jenny Zhang, Attorney at Law, Lawyer, Law firm in Dalian, China

China‘s Ministry of Commerce (MOC) Thursday denied its refusal to approve Coca-Cola’s acquisition of Huiyuan Juice Group was protectionist.  

MOC spokesman Yao Jian said the decision would have no effect on China’s policy in accepting foreign investment.

Yao said the ministry made the decision based “on sufficient investigation and research, on the basis of facts, and strictly inline with the country’s anti-monopoly law.”

He said countries worldwide commonly reviewed acquisitions under anti-monopoly laws, and China was no exception. 

 “The purpose of the examination is to maintain market competition, protect consumers and safeguard the public interest,” he said.Foreign Ministry spokesman Qin Gang echoed Yao’s comments, saying the rejection of the bid was in no way protectionism.

 The government would continue to accept foreign investment, enhance opening up and provide foreign investors with a good investment environment.

“Products of the Coca-Cola company are available anywhere in China’s market. The country’s market is fully open to foreign companies,” said Qin.

Mei Xinyu, a trade expert with the MOC, said the rejection didn’t indicate that the country had closed the door to foreign investment, neither did it equal protectionism.

Coca-Cola offered to buy Huiyuan, the nation’s largest juice maker, for 17.92 billion Kong Kong dollars (2.3 billion U.S. dollars) in cash on Sept. 3. The MOC announced on Wednesday that the bid failed to meet requirements set out in the anti-monopoly law.

Hours after the decision was announced, Coca-Cola Company and Huiyuan said that they respected the decision.

Galaxy Securities analyst Zuo Xiaolei said the failed acquisition would not have any “substantial effect” on Huiyuan, because the company’s domestic market had not changed. 

Wang Zhile, a researcher with the MOC, said the failed bid might have a short-term negative effect on Huiyuan but the company would still play an important role in the country’s pure juice market.

“However, the company should reconsider its development in the domestic market, so that it will grow better in the long run,” he said.

Source:Xinhua

Source: China Daily

The government will not adopt a “buy Chinese” products’ policy to stimulate its economy because that would be imposing trade protectionism, Vice-Commerce Minister Jiang Zengwei said yesterday.

Domestic and foreign products will be treated on equal footing “as long as there is demand”, he told a press conference.

Some US senators’ efforts to introduce a “buy American” clause in its economic stimulus bill have alarmed the international community.

The Chinese government has already taken measures to stimulate the domestic market, Jiang said, but will not adopt a “buy Chinese” policy mirroring the “buy American” clause.
Jiang’s remarks were in response to a question whether China would experiment with a policy similar to the US clause to boost domestic demand.

“In the age of globalization, no country can expect to meet all its domestic demand with its own products,” he said.

What every country should do is to try to best meet its consumers’ demand through international trade, he said, stressing that the competitiveness of an economy lies in the quality and prices of its products.

US stimulus bill
The economic stimulus bill under consideration of the US Senate makes it mandatory for US-made iron and steel to be used in projects paid for by the bill. But President Barack Obama has expressed concern over the provision, and critics have warned that it could prompt other governments to resort to protectionism.

“I think that would be a mistake right now,” Obama told ABC News last week. “That is a potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe.”

Though senators agreed to specify in the bill that international trade deals might not be violated, they rejected a proposal to remove the clause altogether.