China's premier tried to reassure executives of leading international companies Saturday that his country's investment climate was stable, and said Beijing would not block exports of rare metals needed to make computers and mobile phones.
Wen Jiabao made the comments during a meeting with German Chancellor Angela Merkel and business leaders that featured pointed concerns on both sides.
"There is an allegation that China's investment environment is worsening," Wen said, the state-run Xinhua News Agency reported. "I think it is untrue."
Siemens AG's chief executive, Peter Loescher, appealed to the Chinese to make sure that investments are carried out in a fair manner, without giving preference according to the nationality of the bidding party.
The CEO of chemical giant BASF SE, Juergen Hambrecht, said investments in China are often linked with a requirement to transfer technology. "This doesn't quite correspond with our idea of partnership," German news agency DDP quoted him as saying.
Such concerns from Europe's biggest economy were also reflected in a World Bank report released this month that said China is one of the world's more restrictive places for international direct investment.
But Wen was quick to point out that foreign money continues to flood into the country.
That wouldn't happen, he said, if the investment climate were deteriorating.
Foreign direct investment in China rose 39.6 percent in June over a year ago to $12.5 billion, the government said Thursday.
For their part, Chinese business leaders said it remains difficult to get visas, DDP reported.
Despite concerns, trade between China and Germany runs more than $100 billion a year. Chinese and German companies, including Siemens, have signed deals worth billions of dollars during Merkel's visit to make trucks and power equipment.
Wen on Saturday also addressed tech industry concerns about Beijing's announcement last year that it would create a reserve for exotic metals used in computers, mobile phones, hybrid cars and other high-tech products. China produces nearly all the rare earths used in lightweight batteries for such devices.
"Regarding certain raw materials and rare earths in particular, it is widely seen as a very new and important problem because we are a little bit worried about the conditions for access, as we don't have such raw materials," Merkel said after one of the German business leaders brought up the topic.
Wen said China would not block their export but they should be sold at a reasonable price and volume, Xinhua reported.
China accounts for 95 percent of global production and about 60 percent of consumption of rare metals, including dysprosium, terbium, thulium, lutetium and yttrium, according to the U.S. Geological Survey.
The United States and other countries have some deposits, and the U.S. met most of its own needs until the 1990s. But other countries cut production as low-cost Chinese ores flooded global markets.
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Associated Press Writer Juergen Baetz in Berlin contributed to this report.
