China's Hu prods West on trade, investment barriers

In a speech to business and political leaders in Singapore, Hu made no mention of the Chinese yuan, a hot topic in global financial markets given the growing pressure from Washington for Beijing to revalue the currency.

Arguing that protectionism stood in the way of a global economic recovery, he called for a push to conclude the Doha round of trade liberalisation talks, which have been stalled for eight years.

“The inherent problems of the international economic system have not been fully addressed and a comprehensive world economic recovery still faces many uncertainties and destabilising factors,” Hu said in a 20-minute speech.

“We must continue to promote trade and investment liberalisation and facilitation and oppose protectionism in all its manifestations, particularly the unreasonable trade and investment restrictions imposed on developing countries.”

China's commerce minister hammered home the point by later telling reporters that developed members of APEC should live up to their pledges of free trade by 2010.

Chen Deming said the use of safeguard measures by “a certain large country” violates international pledges against protectionism, adding that not recognizing China as a free market leads to abuse of anti-dumping rules.

Although Chen did not name the United States, which recently for the first time imposed safeguard measures against Chinese tyres, the comments point to concessions China may be seeking ahead of U.S. President Barack Obama's visit to China, which starts on Sunday.

Obama arrived in Japan on Friday, the first leg of a tour that will take him to the Asia Pacific Economic Cooperation (APEC) summit over the weekend, then China and South Korea.

Investment Blocks

The 21 leaders of APEC, which accounts for more than half of global output and 40 percent of world trade, will agree to stick with economic stimulus policies until “a durable economic recovery has clearly taken hold”, according to a draft declaration to be issued at the end of the summit.

Hu's reference to investment restrictions comes after years of efforts by Chinese state-owned firms to make resource investments in the United States, Canada, Australia and Chile, many of which have been blocked by labour opposition and national security concerns.

Bilateral ties with Australia have been under particular strain because of Canberra's opaque process for vetting foreign investments, with some high-profile deals falling through before a decision was reached or after strict conditions were imposed.

Hu's comments are likely to be seen as a riposte to pressure from the U.S. administration on its currency, which says an undervalued yuan is one factor contributing to imbalances between the world's leading and third-biggest economies.

Obama has said he will raise this issue on his visit to China, which has effectively pegged the yuan against the dollar since mid-2008 to cushion its economy from the global downturn.

China's central bank said earlier this week that it will consider major currencies in guiding the yuan, suggesting a departure from the peg.

The country then signed up at the end of a meeting of Asia Pacific finance ministers in Singapore on Thursday to a statement that promised “monetary policies consistent with price stability in the context of market-oriented exchange rates.”

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