Foreign research institutes are encouraged to operate in China by linking up with local partners for new science and technology projects and development, Minister of Science and Technology Xu Guanhua said yesterday.

Xu was speaking at a China-EU forum on science and technology strategy, which opened yesterday in Beijing.

Xu suggested that China and the EU (the European Union) could further propel cooperation in the fields of hydrogen and nuclear energy resources, space projects and aviation, the environment, and biological and information sciences.

"To deepen mutual understanding of scientific progress, the two sides should also make it possible to hold China's Technology Year Exposition in Europe regularly, and the EU could sponsor similar activities in China," said Xu.

He called on small and medium-sized enterprises from both sides to cooperate closely with one another in order to upgrade the development of high-tech industries.

"The Chinese authorities are trying to prime the environment for foreign research institutes," said Zhang Zhiqin, an official of the ministry's Department for International Cooperation.

An estimated 300 branches of foreign research institutes have been established over the last two years. France's Pasteur Institute, for example, set up a branch in Shanghai last year.

However, "conditions need to be further improved for foreign institutes to better perform in China," said Zhang.

Zhang added, "We are planning to work out tax and other preferential policies for foreign institutes."

Meanwhile, the Ministry of Science and Technology encourages local universities and research institutes to compete in overseas markets. Huawei and Hai'er companies, for example, have already set up operations in Europe.

Also speaking at yesterday's opening ceremony of the forum, Janez Potocnik, EU commissioner for science and research, said that the EU is willing to cooperate with China in environmental projects including climate change and sustainable development.

Since the EU opened its Sixth Framework Program to China in 2002, Chinese scientists have joined 60 EU projects including mobile communications and food safety. Similarly, European scientists have also participated in China's national key basic research projects including contributing training resources in areas such as energy development.

In a separate event, China held a reception in Beijing yesterday to mark the 30th anniversary of its diplomatic relations with the European Union. Senior diplomats from both sides vowed to enhance dialogue and cooperation in all fields although their differences in trade, arms sales and human rights remain to be solved, Xinhua reported.

(China Daily May 13, 2005)