Guangzhou, China — European firms say internet restrictions, regulatory barriers and market-access restrictions hampering prospects on the mainland.
Nearly half — 48 percent — of respondents to an annual survey by the European Union Chamber of Commerce in China say that doing business in China has gotten tougher in the past year.
"[It] is time for China to remove the training wheels in order to create a sustainable economy in the long term," said European Chamber President Mats Harborn. "We have seen some improvements this year in areas such as law enforcement, but we are still far from an environment that fosters fair competition."
Forty-six percent of respondents say market access restrictions and regulatory barriers have thwarted business plans. The same percentage expect regulatory obstacles to worsen over the next five years.
Last year, President Xi Jinping pledged reforms and greater market opening at the World Economic Forum in Davos, Switzerland. But change has come slowly in the eyes of the respondents to the survey run by the European Union Chamber of Commerce in China. Only 6 percent saw a significant increase in market opening from 2016. And 19 percent said they felt obligated to transfer technology know-how to China in order to maintain market access.
China's much-ballyhooed Made in China 2025 program favors domestic companies — 43 percent of respondents said they believed it discriminated against foreign companies, while 29 percent say they know of subsidies offered only to Chinese companies, with the environment and renewable energy seen as foci of favoritism.
Two-thirds of European companies see China's Belt and Road Initiative as largely irrelevant to their business, although aerospace and civil engineering and construction firms are optimistic about opportunities from the mammoth international infrastructure push.
Just over half, 51 percent, think foreign firms are treated less favorably than domestic ones, which is down slightly from last year, but sectors vary dramatically. While only 32 percent of chemical/petroleum firms see favoritism for mainland companies, 67 of medical-device companies believe they are treated unfairly.
Fully a quarter of European firms believe they will never see a level playing field for all companies.
Since the survey was conducted in February and March, U.S.-China trade talks have fallen through and both countries have followed through on tariff threats.