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Companies may cut China investment: group

BEIJING --- Frustrated by China's market barriers, European companies might shift future investment to other economies, a business group said Tuesday, in an unusually pointed warning about a possible backlash over Beijing's trade policies.

Beijing faces a flurry of complaints by the European Union, the United States and other nations that it is violating its trade commitments by protecting or subsidizing its companies in industries from steel to solar power. With a weak global economy threatening to push up unemployment, Washington and other governments face political pressure to respond.

Half of some 557 European companies that responded to a survey say regulatory barriers have limited their business opportunities and hurt profits, according to the European Union Chamber of Commerce in China. One in five companies said that might prompt them to shift future investment to other economies.

“Companies feel as if they missed business opportunities, and if this continues, they might consider to shift their business operations outside of China,” the group's president, Davide Cucino, said at a news conference.

Cucino said that if he were a Chinese official, “I would think this sounds alarming.”

He appealed to Chinese authorities to give foreign companies access to banking, insurance and a wide array of other “strategic industries” that are dominated by state enterprises.

Foreign business groups have complained for years that Beijing improperly favors Chinese enterprises but global companies have continued to invest and are reluctant to talk publicly about their frustrations for fear of angering communist authorities. Thursday's report was unusually explicit in saying companies' frustration has grown so severe that they might scale back investment plans.

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