EU survey confirms fears over China’s ‘unfair’ policies

European companies say increasingly unfair, capricious Chinese government interference is making China a less attractive place to do business, according to a survey released Tuesday by a EU business group.

Many European companies say they expect the regulatory environment to worsen for foreign firms operating in China over the next two years, according to the annual European Union Chamber of Commerce's business confidence survey in China for 2010. The survey of 500 European businesses in China found that 36 per cent believe Chinese government policies have become less fair in the past two years and a slightly higher percentage expect the situation to get worse in the future.

Businesses complained in particular about selective enforcement of laws and regulations, spotty protection of intellectual property rights and opaque processes for company registrations, visas and work permits, the EU Chamber of Commerce in China said.

The European complaints match those of other foreign companies who have complained of a worsening business climate in China. The results of the EU survey come just months after US companies in China voiced concerns about what they perceived as an anti-foreign-investor attitude from Beijing in a similar survey.

Concerns about the fairness of certain Chinese government policies, such as those aimed at supporting "indigenous innovation", which favour local companies and technology, have been mounting in the past year even as China has emerged from the global financial crisis faster and in better shape than other economies. Chinese premier Wen Jiabao met earlier this year with foreign business executives as part of Beijing's efforts to show it doesn't discriminate against foreign investors and to address their concerns.

The survey and the chamber's president warned that conditions were dampening enthusiasm for the China market.