Is Shenyang in China’s industrial heartland the worst place in the world to start a business?

An influential business lobby group says a lack of clarity in policy as just one of several obstacles that can deter foreign companies from operating in Shenyang, a major industrial hub in China’s northeast struggling to reverse economic stagnation and attract investment.

In its first position paper for Shenyang, the capital of Liaoning province, the European Union Chamber of Commerce also said heavy governance, a loss of skilled workers, an uncompetitive work visa and permit system, limited options for international education and poor air quality had reduced the city’s ability to attract foreign investment.

If no improvement was made, Shenyang might “risk losing out on potential foreign investment to other Chinese cities”, the report said.

“Instead of continuing to engage in high-level discussions and developing more broad policy goals that merely scratch the surface, the city needs to dig deep and plant the seeds of reform.”

The assessment comes amid a debate over how to cure the economic plague in this heavy manufacturing region deeply influenced by the state economy.