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China Says It Welcomes Foreign Investment

Trying to reassure uneasy foreign companies, commerce minister said China still welcomes foreign investment despite its rejection of Coca-Cola's bid to buy a fruit juice producer.

BEIJING (AP) -- China still welcomes foreign investment despite its rejection of Coca-Cola Co.'s bid to buy a fruit juice producer, the commerce minister said, trying to reassure uneasy foreign companies.

Chen Deming's comments at a weekend economic forum came as diplomats and business groups were waiting for details of last week's denial of Coca-Cola's acquisition of Huiyuan Juice Group Ltd. Regulators cited anti-monopoly concerns, but industry analysts say Beijing wanted to keep a successful local brand out of foreign hands.

"We still want Coca-Cola and Huiyuan to be able to have very healthy development," Chen said, according to a transcript on the Web site of the Communist Party newspaper People's Daily. "We also want other foreign enterprises to come to China to carry out investment and development."

China is a top destination for foreign investment and received $5.8 billion in February despite a decline amid global financial turmoil. But foreign acquisitions of established companies are still rare and politically sensitive.

"Some say this shows China does not welcome foreign investment. I think this could be an extremely big mistake," Chen said.

Chen repeated Beijing's assertion that Coca-Cola's $2.5 billion offer for Huiyuan was rejected because it would have hurt competition. The deal would have been the biggest foreign acquisition of a Chinese company to date.

Foreign business groups have appealed to Beijing for a detailed explanation of its ruling, the first rejection of a foreign acquisition on anti-monopoly grounds since a new Chinese law on the issue took effect Aug. 1. The law bars mergers that reduce competition but regulators have wide latitude to decide how to define that.

Industry analysts say the ruling left unclear how the law will be applied.

"The process should have been more transparent and should have solicited more opinions during the review in order to develop balanced anti-monopoly measures and standards for the future," a leading Chinese business magazine, Caijing, said on its Web site.

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