* Looking for foreign blue chips to list in China
* Says not blocking U.S. chicken imports
* Decline in June imports, exports eases
BEIJING, July 2 (Reuters) - China will encourage foreign-funded firms to make share offerings in China, a senior Ministry of Commerce official said on Thursday during a wide-ranging briefing where he also flagged that annual declines in exports and imports began to improve in June.
China has talked for at least a decade about allowing foreign firms to list shares domestically, but has made little progress on the initiative.
"We will continue to work with other departments on policies regarding domestic IPOs of foreign firms to actively guide high-quality foreign firms to make IPOs in China," Chen Jian, a vice-commerce minister, told reporters.
HSBC, Europe's largest bank, could be in the running to be the first to list.
The bank, with a Shanghai branch office that opened some 150 years ago, has gained a lot of goodwill for promising not to sell its strategic investment in Bank of Communications while other foreign banks rushed to the exits.
Chen said Beijing was also looking at ways to encourage inflows of foreign direct investment.
"In order to boost investor confidence and expand the inflow of foreign investment, the Ministry of Commerce is working with other departments to develop measures to stabilise FDI inflows," Chen told a news conference.
Annual foreign direct investment (FDI) inflows have more than doubled in the past 10 years, especially since China joined the World Trade Organization in 2001.
Last year, FDI surged to $92.4 billion from $74.8 billion so far in 2009, however, monthly inflows have dropped from year ago levels, due to the financial crisis.
China is facing the first "comprehensive fall" in FDI since the Asia Financial crisis in 1998, said Chen.
Beijing was looking in particular at foreign investments that could help China's economic upgrading, create jobs and improve the environment, he said.
JUNE TRADE IMPROVEMENT
The country's outbound investment fell in the first half of the year from a year ago, but Chen said he expected overseas investments flows to return to strong growth in the future, without giving any timeline.
China continued to support domestic companies with ambitions to invest overseas, but said many Chinese firms still lacked the experience operating in foreign markets, he said.
Sichuan Tengzhong Heavy Industrial Machinery, a little-known Chinese machinery maker with no experience in the car industry, raised eyebrows in June when it unveiled a tentative plan to take over Hummer from General Motors.
Doubts about whether the deal would get Beijing's approval have been swirling as many believe Tengzhong lacks the experience and expertise to revive money-losing Hummer's operations.
"The Ministry of Commerce's attitude is that it is the company's own business, and we would mainly look at whether you have the ability," said Chen, who emphasized that his ministry had not yet received any application from Tengzhong for the planned acquisition.
While China looked at ways to increase investment flows, the year-on-year decline in exports and imports began to improve in June from previous months, he said, without providing any specific numbers.
Official June trade figures are expected to be released sometime next week.
In April and May, exports and imports both fell more than 20 percent from year-earlier levels.
While the improvement in China's June trade figures was the latest indication the economy was turning around, Beijing's relations with its main trading partners remained tense.
Chen said media reports that China would block imports of U.S. chicken were not true.
"According to our information, China's chicken imports are normal and orderly with stable prices," he said.
The USA Poultry and Egg Export Council earlier this week said China had been telling U.S. producers that import permits would not be issued for U.S. poultry products.
"There is no protectionism," he said. (Reporting by Zhou Xin and Alan Wheatley; Writing by Kirby Chien; Editing by Ken Wills)