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China avoids condemning India over Huawei, ZTE ban

Updated:2010/5/18 09:48

China's commerce ministry said on Monday New Delhi should not discriminate against Chinese firms, but did not directly condemn a bar on
Indian operators buying telecoms equipment from two Chinese companies.

India has banned mobile phone operators from placing orders with ZTE Corp and Huawei Technologies because of security concerns, industry sources say.

But Beijing, which has not shied away from criticising other countries, including the United States, over investment and trade restrictions, appears to be downplaying the ban.

Commerce Ministry Spokesman Yao Jian, when asked about the ban, said New Delhi should aim for a fair and transparent investment climate and emphasised the large stake Indian firms have in the Chinese market.

"We hope that (Indian) policies to be launched should be fair to all enterprises...and should not discriminate against Chinese enterprises," Yao told a regular news conference, in Beijing's most extensive comments on the issue so far.

"The investment by Indian firms in China is larger than Chinese firms' investment in India, and China has created a very good service and investment environment for foreign investment."

He also urged China's neighbour and rival to carry out any investigation according to international rules, rather than in a rushed fashion, but gave no further details.

Given the huge amount of business at stake, officials on both sides are likely to be keen to ensure the issue does not snowball, probably aiming to resolve it through dialogue, in the same manner other twitchy issues have been dealt with.

"We hope that the two countries can improve cooperation and negotiation to solve the problem," Yao said, and emphasised that Chinese companies have always "paid attention" to localisation -- manufacturing at least a portion of their products in foreign countries when they invest there.

The two firms blocked from what has become the world's fastest-growing mobile market said last week they may build factories in India as they scrambled to allay security fears.

India worries that Chinese telecoms network equipment can be used for spying or loaded with "malware". It also fears a rival could shut down telecoms service during a time of crisis.

A series of attacks on Indian government websites by suspected Chinese hackers has also hardened the authorities' position on importing potentially sensitive equipment from China.

Indian government ministers and officials have repeatedly denied any country-specific ban; it is mandatory for all Indian telecom carriers to seek security clearance from the telecom ministry before placing a purchase order, Chinese or otherwise.

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