European firms sees slowing of China reforms

(BEIJING) - A leading European business group in China said Wednesday that Beijing was backtracking on the implementation of reforms aimed at opening up the world's third largest economy to foreign firms.

"In many sectors there is a slowdown, even a partial reversal, of reforms," Joerg Wuttke, the president of the European Union Chamber of Commerce in China, told reporters as he presented his group's annual report.

According to the report, which each year offers Chinese authorities a list of proposals, European businessmen have noted that opening-up measures have tapered off over the past year, as the global economic crisis took hold.

Leaders in certain sectors said the situation had worsened due to government intervention and restrictions on foreign investment.

"We're calling again for measures to create a fair and transparent environment," the chamber said, while noting "positive" changes in several areas such as antitrust law and the granting of 3G mobile phone licences.

But the group pointed out that foreign companies wishing to operate in China continued to face major barriers, such as the need for auto companies to create joint ventures with local firms.

Wuttke said certification rules were implemented in certain sectors to limit market access or keep foreign companies out altogether.

He cited the example of an unnamed company that was the leader in providing encryption technology to Chinese banks, telecoms firms and transportation companies.

But the European firm was forced out of the market when China introduced new rules requiring a certain certification that no foreign firm or foreign-invested Chinese company has been able to obtain, he said.

"This is definitely a discriminatory process against foreign companies," Wuttke said.