For years, foreign businessmen on the mainland complained about a litany of problems that made doing business there a nightmare. But the mood took a definite turn for the worse late last year when Beijing unexpectedly announced its new Indigenous Innovation Product Accreditation Programme on ministry websites.
Government officials said the new programme would promote Chinese innovation. Foreign companies feared it was designed to lock them out of the government procurement market in favour of the country's 'national champions'. The result was an unprecedented international outcry. And while Beijing proceeded to pull back in the face of widespread criticism, fears remain among the foreign business community, for whom China is one of the few bright spots in the global economy.
'Foreign companies are seeing a wide array of policies that make life difficult in China,' said James McGregor, senior counsellor for APCO Worldwide. 'It appears that the future market opportunities are narrowing.'
In a rare public comment about the frustrations being felt by the international business community in China, McGregor wrote on a Time website in January that in his more than two decades in China, he had seldom seen the foreign business community 'more angry and disillusioned than it is today'.
He went on to say that 'banquet-table chatter is now dominated by swapping tales of arrogant and insolent Chinese bureaucrats and business partners'. He said further that the complaints ran the gamut from 'inconsistent and non-transparent enforcement of regulations, rampant intellectual-property theft, state penetration of multinationals through union and Communist Party organisations, blatant market impediments through rigged product standards and testing, politicised courts and agencies that almost always favour local companies, creative and selective enforcement of WTO requirements ... The list goes on.'
In April, Joerg Wuttke, president of the European Chambers of Commerce in China, wrote a surprisingly frank and bold assessment in the Financial Times titled 'China is beginning to frustrate foreign business'.
'In the 10 years since the establishment of the European Union Chamber of Commerce in China, I have seldom seen market sentiment among members so bleak or pessimistic,' wrote Wuttke. 'After 30 years of progressive market reforms, many foreign businesses in the country feel as though they have run up against an unexpected and impregnable blockade.'