China's Wen says foreign firms will get fair treatment

Chinese Premier Wen Jiabao has vowed a level playing field for foreign firms despite a recent order to local governments to favour domestic companies when purchasing goods, the government said.

"The Chinese government has always insisted on maintaining a market environment of fair competition and will never adopt policies to discriminate against foreign companies," Mr Wen told German Chancellor Angela Merkel in a Thursday phone call, the foreign ministry said on its website.

He also said Germany should work with China to oppose protectionism, according to the statement posted late Thursday.

China has repeatedly warned against protectionism in response to the global economic crisis but has recently been accused of doing just that.

German Economy Minister Karl-Theodor zu Guttenberg on Tuesday voiced concerns about Beijing's recent "Buy China" call and vowed to take measures to prevent damage to Germany's economy.

"I am deeply concerned about developments in China and will do what I can to avoid any negative consequences for Germany's exporters," Mr zu Guttenberg was quoted as saying in an interview with the Frankfurter Allgemeine Zeitung daily.

"In times of crisis, there is a temptation to seal off the domestic economy with protectionist measures. That is the wrong answer, as we learned during the last big global economic crisis in the 1980s," he added.

Earlier this month, China's National Development and Reform Commission ordered local governments to favour domestic companies when carrying out projects that are part of a massive anti-crisis stimulus package.

"For government procurement, apart from cases where products and services are not available domestically or cannot be acquired on reasonable commercial terms, domestic products should be purchased," said the top economic planning agency.

The call for preferential treatment for Chinese firms followed claims by domestic businesses that a large part of Beijing's stimulus money had gone into foreign pockets, Chinese media reports said.

The Wen-Merkel talks came after German industrial group Siemens was reported to have said earlier this week that it expects to land orders worth $2.9 billion over the next three years as part of China's stimulus.

However, the European Chamber of Commerce said recently that China "seems to have readily wiped foreign providers out of the country's four-trillion-yuan ($585 billion) stimulus package".