The government is likely to clear foreign direct investment proposals from Chinese companies ahead of Prime Minister Atal Bihari Vajpayee's visit to Beijing next month.

The issues related to Chinese proposals had been resolved, a government official told Business Standard, adding that all pending and new proposals would be taken up for consideration by the departments concerned.

The Foreign Investment Promotion Board has not cleared a single proposal from China over the past one-and-a-half years or so due to security concerns. Even proposals from consumer durable manufacturers have been held back on grounds that decisions regarding them should be taken only after a policy on Chinese investment has been drafted.

According to the source, the government has cleared the policy which states that there will be no bar on investments from any country.

However, proposals for investment in certain strategic sectors and in areas close to defence or space research centres would not be permitted, he said, adding that the policy was not China-specific.

The FIPB has considered two proposals from China -- those of consumer durables manufacturer Haier and Huwaei Tech Investment Co Ltd. Sources said Haier's proposal was expected to be cleared.

Haier's erstwhile partner Hotline has filed an objection to the its proposal. But government officials said the cooling-off period should be taken into account, which was three years in this case.

Work on other pending proposals like those of television maker TCL Electronics has also begun. Sources said all pending applications from Chinese companies were being perused afresh and would be placed before the FIPB in subsequent meetings. In fact, Chinese proposals have started flowing in through the automatic route already.

The issue of Chinese FDI may not come up during Vajpayee's visit to Beijing. But his visit would be significant in terms of improving economic relations between the two countries, the source said.

A taste for trade

• FIPB has not cleared any proposal from China over the past one-and-a-half years due to security concerns.
• The board has considered two proposals from China -- those of consumer durables manufacturer Haier and Huwaei Tech Investment Co Ltd.
• Work on other pending proposals like those of TCL Electronics has begun.