China assures UK firms on trade: Li Peng says British firms will not suffer discrimination over Hong Kong

LI PENG, the Chinese Prime Minister, yesterday assured British businesses they would not suffer discrimination as a result of the collapse of Sino-British negotiations on political reform in Hong Kong.

After months of warnings that the diplomatic row would inevitably affect China's economic and trade relations with Britain, this was the first time a senior Chinese official had made such a commitment. The change coincides with revitalised attempts by China to rejoin the General Agreement on Tariffs and Trade.

'The Chinese government will not adopt a discriminatory policy against British enterprises. British enterprises are welcome to participate in the competition for the Chinese market,' Mr Li said.

He added, however, that if relations between the two countries were not good, it was 'impossible for it not to have any impact' on economic relations. The Chinese side would try 'to minimise the negative effects' on British companies competing for contracts, and for business in China, he said.

One British businessman last night welcomed the statement, but said that discrimination was always difficult to prove, and local officials might still be wary of opting for British firms if they were confused by China's official policy. 'China is not going to go out of its way to help British companies; they might just publicly stop threatening them,' he said.

Mr Li's public volte face follows a robust position taken at the beginning of the month by Sir Leon Brittan, the European Union Trade Commissioner, when he visited Peking to discuss the Gatt.

After Wu Yi, the Minister of Foreign Trade and Economic Co-operation, declared that the 'unfriendly and uncooperative position of the British Government on the question of Hong Kong cannot but affect the economic and trade relationship between China and the UK', Sir Leon said that the principle of non-discrimination was fundamental to Gatt and was considered a 'very serious matter' by the EU as a whole.

GPT, the GEC-Siemens telecommunications joint venture, has won a pounds 40m order for transmission systems in China.

(Photograph omitted)