Chinese firms 'playing by the rules'

Chinese investors are trying to follow the rules when spending money abroad, the head of one of China's biggest private equity firms says, as global leaders increasingly look to the country to prop up the world economy.

Worries that Europe's slowdown would hurt stronger economies are overshadowing discussions at the World Economic Forum in the Swiss ski resort of Davos.

Attention has turned to how China can help, even as some remain wary about its growing dominance.

John Zhao, CEO of Hony Capital, said foreign prejudice about Chinese investments is unfair, but acknowledged that some companies are still learning a game that much of the world has been playing for decades.

Chinese companies and government funds have been using vast reserves of cash to buy up foreign companies and invest in foreign government bonds in recent years.

But with billions of dollars in Chinese investments pouring into their countries, some governments have accused China of seeking to exploit the economic weakness of others to grab valuable natural and technological resources at rock bottom prices.

The administration of US President Barack Obama has also repeatedly accused China of breaking global trade rules by giving unfair protection to its companies and domestic workers.

"The vast majority of Chinese companies are trying to follow the rules as they understand it," said Zhao, whose company controls PC maker Lenovo, which bought IBM's computer division in 2005. "But many Chinese companies are still trying to learn the rules."

The director general of the World Trade Organisation, Pascal Lamy, said China will continue to face "public perception problems" from its investments abroad.

One way for China to ease the rest of the world's fears about its extravagant corporate shopping sprees is be more open about its vast poverty problem at home, said Lamy.

The Davos forum, where business and political leaders gather every year in an invitation-only event, is under growing criticism by those who feel it's too removed from the real world.

Nigerian Finance Minister Ngozi Okonjo-Iweala and other leaders brought any sense of euphoria crashing back down to earth, appealing for the millions of people who do not have enough food to eat.

"The world can feed itself. Africa can feed itself. The problem is we have vulnerable populations who do not have access," Okonjo-Iweala said.

Leaders at Davos are looking later today at challenges to democratic institutions around the world, including protest movements such as Occupy Wall Street.

Activists from Occupy Davos are camping out in igloos and yurts to call attention to income inequality.

"With 50 million people going below the poverty line, and over 200 million becoming unemployed with the recent crisis, it's stopped being a question of hardship and starting to become an issue of human rights violations," said Salil Shetty, the secretary-general of Amnesty International.

"This is a man-made crisis and the people who have caused the crisis, many of whom are in Davos, should be held to account," he said.