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EU Companies Worried About 'Buy China' Policy

China says policy is meant to spur domestic innovation but foreign companies worry they will be shut out of multibillion-dollar purchases of computers and other goods.

BEIJING (AP) -- The European Union added to pressure on China over its plan to favor domestic technology in government purchasing, saying Wednesday it wants assurance the policy will not be used to exclude foreign suppliers.

The Chinese government says the policy is meant to spur domestic innovation but foreign companies have expressed alarm they will be shut out of the government's multibillion-dollar annual purchases of computers and other goods. The United States and foreign chambers of commerce have criticized the plan.

European companies worry the strategy is unfairly blocking market access, said Serge Abou, the ambassador to Beijing for the 27-nation EU. Abou said he wrote to Commerce Minister Chen Deming seeking an explanation in December but has not received a response.

"Reassure us fully that this will not be used as a way to differentiate foreigners from the Chinese," Abou said at a news conference. "We ask for a total absence of discrimination."

The complaint comes ahead of an April 29 visit to Beijing by a team led by European Commission President Jose Manuel Barroso. Abou said Barroso is expected to meet with Chinese Premier Wen Jiabao, the country's top economic official.

The Chinese procurement plan says the government will favor products based on domestically developed technology. Foreign companies can apply to be treated as domestic suppliers, but business groups say conditions are so strict that even those with research and development facilities in China are unlikely to qualify.

The plan is part of a sweeping government effort to promote "indigenous innovation." It reflects Beijing's growing assertiveness as it tries to make Chinese industry more autonomous after depending on foreign money, markets and technology for three decades to drive its economic boom.

Trade groups say it violates the spirit of China's World Trade Organization free-trade commitments and its pledges to avoid protectionism that might harm the global recovery.

Abou said European companies in China should be allowed to participate fully in public tenders just as Chinese companies are allowed to participate in public tenders in Europe.

"If they give a preference to what they call Chinese indigenous technology, I consider that technology developed in China by Philips or Siemens or Alcatel, or what have you, must be considered equally in China, because they are invested in China," he said.

Abou also criticized the "China Compulsory Certification," an inspection process for industrial and technology standards that business groups say appears to be meant to favor Chinese companies. He said companies that want to export products to China sometimes face delays of years in obtaining certification.

"This system is more and more complex and it is the main obstacle to imports in China and I don't hesitate to qualify it as protectionist," Abou said. "We are more and more worried because the mood seems to be not to simplify these procedures which are very cumbersome but to make them even more complex."

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