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2011-05-26 | All chapters

China climate faulted in poll
Wall Streeet Journal, 26th May,2011

BEIJING–A growing share of European companies say China's policies toward foreign businesses in the country are becoming more discriminatory, according to a survey from the European Union Chamber of Commerce in China that marks the latest sign of discontent about the business environment in the world's No. 2 economy.

In the survey, released Wednesday, 43% of European-based companies with offices in China's mainland said they view the country's regulatory practices as having declined in fairness over the past two years.

The government favors domestic businesses, giving them better tax incentives and financing opportunities, they said. In last year's survey, 33% expressed discontent with the regulatory environment.

This year's survey did not cite specific examples of disputes or companies receiving unfavorable treatment. While more companies are worried about the direction of regulation in China, a large majority are currently making money here.

The survey found that 74% of European companies in China were profitable in 2010, and 71% are expecting profit growth of at least 5% in 2011. The EU Chamber aims to address members' concerns about the future business environment by asking Chinese leaders for more ability to participate in regulatory changes, said Davide Cucino, the group's president.

"There are so many companies prospering here, and we want to ensure that they will continue to do so," Mr. Cucino said. China's leaders have insisted that foreign companies operating within the country receive fair and equal treatment.

The EU Chamber survey, which was conducted in partnership with German consultancy Roland Berger and questioned 598 businesses, also found that 46% of European companies operating in China expect unfair practices to persist.

European companies claimed in a study last month they have been unfairly shut out of the bidding process for China's $1 trillion market for public projects.

China's Ministry of Commerce didn't immediately respond to requests for comment.