China's premier tried to reassure foreign business leaders Saturday that his country's investment climate was stable and said Beijing would not block exports of rare metals needed to make computers and mobile phones, state media reported.
Wen Jiabao made the comments while meeting German Chancellor Angela Merkel and business leaders from the two nations.
"There is an allegation that China's investment environment is worsening," Wen said in comments carried by the state-run Xinhua News Agency. "I think it is untrue."
A World Bank report released this month said China was one of the world's more restrictive for international direct investment. But Wen was quick to point out that foreign money continues to flood into the country.
That wouldn't happen, he said, if the investment climate was deteriorating.
Foreign direct investment in China rose 39.6 percent in June over a year ago to $12.5 billion, the government said Thursday.
Wen also addressed concerns by the tech industry outside China about exotic metals used in computers, mobile phones, hybrid cars and other high-tech products. China produces nearly all the rare earths used in lightweight batteries for such products, and it sparked concern late last year when the government announced it would create a reserve for them.
"Regarding certain raw materials, and rare earths in particular, it is widely seen as a very new and important problem because we are a little bit worried about the conditions for access, as we don't have such raw materials," Merkel said after one of the German business leaders brought up the topic.
Wen said China would not block their export, but they should be sold at a reasonable price and volume, Xinhua reported.
China accounts for 95 percent of global production and about 60 percent of consumption of rare metals, including dysprosium, terbium, thulium, lutetium and yttrium, according to the U.S. Geological Survey.
The United States and other countries have some deposits, and the U.S. met most of its own needs until the 1990s. But other countries cut production as low-cost Chinese ores flooded global markets.
Associated Press Writer Juergen Baetz in Berlin contributed to this report.