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60% of foreign companies in China feel 'targeted': survey

BEIJING -- Foreign companies in China feel increasingly targeted for unfair enforcement of anti-monopoly and other laws and might cut investment if conditions fail to improve, a U.S. business group said Tuesday.

The American Chamber of Commerce in China's report adds to mounting complaints about a flurry of investigations of global automakers, technology suppliers and other companies. It is a reversal for companies that welcomed plans unveiled by the ruling Communist Party in late 2013 to open the state-dominated economy to more private competition and adds to pressures at a time of slowing growth and rising competition from local rivals.

Almost half of companies that responded to a survey last week believe they are targeted for “selective and subjective enforcement” of anti-monopoly, food safety and other rules, the chamber said in a report. It said China faces a growing risk it “will permanently lose its luster as a desirable investment destination.”

“Many areas of regulation are overly focused on foreign multinationals,” said the chamber's chairman, Greg Gilligan.

Out of 164 people who responded to the survey, 60 percent said they felt “less welcome” in China, up sharply from a survey in late 2013 in which 41 percent of 365 respondents expressed the same sentiment.

The ruling party under President Xi Jinping has promised to make China's economy more productive by opening more industries to private and foreign competition. But at the same time Beijing is trying to create “national champions” in fields from autos to telecoms to aerospace. Business groups say that has led regulators to use a 6-year-old anti-monopoly law and other regulations to shield domestic companies from competition.

The European Union Chamber of Commerce in China also expressed concern last month about the anti-monopoly investigations. It said it received reports companies were pressured by regulators to accept penalties without a full hearing and avoid involving their governments.

Trade officials from the United States, the European Union and Japan say they are watching the investigations but have yet to announce whether they consider them a violation of China's free-trade commitments.

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In this April 20 photo, visitors look at a Mercedes car at the company booth during the Auto China show in Beijing, China. Foreign companies in China feel increasingly targeted for unfair enforcement of anti-monopoly and other laws and might cut investment if conditions fail to improve, a business group said Tuesday, Sept. 2. (AP)

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