China Locks Out Foreign Business

The European Union Chamber of Commerce has sharply criticized Beijing for violating its World Trade Organization commitments, effectively shutting out foreign businesses.

Wind power, petrochemicals, and construction firms are among the industries who feel most affected by China’s growing barriers to trade, stated the EUCC report.

Unequal and discriminatory application of laws and regulations, discriminatory government procurement policies, weak protection of intellectual property and regulatory reform backsliding were all serious concerns for European businesses in China, according to the Chamber.

Chinese premier, Wen Jiabao admitted that the government still had some work to do but said he wanted to create an environment that encouraged investment, according to EUCC officials.

Despite that, China’s policy against foreign businesses seems to be growing. Twenty-two percent of respondents to the EU Chamber’s latest survey percent expected no improvement, while nearly 40 percent said they expected China’s regulatory environment for foreign businesses to worsen over the next two years.

In recent months, a number of executives, including the chief executives of industrial giants General Electric, Siemens and BASF, have commented on the tougher operating environment for foreign businesses in China.

In July, Jeffry Immelt, GE's chief executive officer, said GE was encountering its toughest business conditions there in 25 years.

“I am not sure that in the end they want any of us to win, or any of us to be successful,” Immelt said.

According to the EU Chamber, just 3 per cent of outbound investment from Europe, or about €5.3 billion, goes directly to China.