Minister Lehtomäki signs agreement on promotion and protection of investments between Finland and China
15 November 2004
At an event held today in Beijing, Paula Lehtomäki, Minister of Foreign Trade and Development, signed a new agreement between Finland and China on the reciprocal promotion and protection of investments. Signing for China was Zhang Zhigang, the country’s Vice Minister of Commerce. The new agreement was negotiated at Finland’s initiative. It replaces the previous agreement, concluded in 1984 and based on the protection principles that had prevailed in the 1970s. Many of the central sections of the old agreement no longer corresponded with the international principles applied today to the protection of investments.
With this new agreement, Finland strives to ensure that the operating conditions of Finnish enterprises on the Chinese market are ensured in a just and equitable manner. The agreement shields investments against political risks and requires that, even in variable conditions, Finnish investments are treated impartially with regard to investments from both foreign and domestic corporations. The agreement guarantees the free transfer of invested funds and their returns to and from the country. Further, the agreement obligates the signatories to pay compensation for losses arising through expropriation, confiscation and damage.
The new agreement is important for Finnish business life, because China is one of Finland’s most important partners in trade and economic relations. China’s membership of the World Trade Organization has further emphasised its role. Finland’s industrial supply and know-how are well in line with the needs of China’s economic development. Finland has international top-level expertise in many sectors that are among the areas of focus in China’s industrial development.
The total value of investments made by Finnish enterprises in China is about four billion euros. At present, more than 200 Finnish enterprises operate in China; of these, over 50 have production plants in the country. The biggest Finnish enterprises include Elcoteq, KCI Konecranes, Metso, Nokia, Outokumpu, Perlos, Raisio, Stora Enso and UPM-Kymmene. When signing the agreement on the promotion and protection of investments, Minister Paula Lehtomäki also encouraged Chinese corporations to invest in Finland.
Additional information: Jukka Nystén, Head of Unit, Department for External Economic Relations, tel. +358 9 1605 5071, and Press Attaché Anna Tonttila, tel. +358 40 5131 669.