Foreign-invested companies should not be seen as a threat to the national economy instead, they should be treated on par with the domestic enterprises.

That was the thrust of the remarks by Wang Zhile, director of the Multinational Company Research Center affiliated to the Ministry of Commerce, in the 2007 Report of Transnational Corporations in China.

"Foreign-invested companies are not foreign companies," he said yesterday. "They are part of the Chinese economy, and play the most active part in China as it faces up to global competition."

His reassurance comes at a time when some commentators are expressing concern that foreign investors' acquisitions and mergers in the country could hurt the economy, and even national economic security.

Wang said foreign-invested companies contribute a third of China's industrial output, a fifth of the tax revenues and 20 million jobs.

"Therefore, Chinese people should not exaggerate the impact of foreign investors taking over domestic enterprises, which are simply commercial deals," he said.

Wang said such acquisitions and mergers have become an important means to attract foreign investment and have helped domestic enterprises access advanced technologies and management expertise.

In fact, an increasing number of Chinese enterprises have tapped overseas markets through acquisitions and mergers of foreign businesses; and Chinese enterprises should learn to compete with foreign rivals in two-way takeovers, he said.

Wang also said foreign companies grabbing more market share did not mean that they have become monopolies in those sectors.

Source: China Daily