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September 02, 2010

European Businesses Says China Breaks Trade Rules

A European business group has accused the Chinese government of failing to honor promises to the World Trade Organization - a policy it says has effectively barred European companies from key markets. The European Chamber of Commerce in China is also urging Beijing to level the playing field for its members and other foreign companies.

In its annual China Position Paper, the business association details what it describes as the protectionist hurdles still impeding foreign businesses almost a decade after China joined the World Trade Organization. The complaints echo those made by American business leaders earlier this year.

Europe wants to help China by investing more in the country, said chamber president Jacques de Boisseson.  But he added, China shuts out foreign businesses by flouting WTO rules and his group has not ruled out going to the WTO to lodge a complaint.

"Bringing a case to WTO panel is a sort of last recourse tool, which I hope we won't have to use," said de Boisseson. "I think the best way is to increase dialogue."

Among the group's complaints are restrictions on access to such sectors as telecommunications and airline reservations. Mr. de Boisseson thinks China's leaders are taking notice of the complaints foreign businesses have.

"I have had the sense in the last six months that our concerns and comments are being heard by the Chinese," he said. "This is relatively new. I think the Chinese are aware they have things to correct."

The European Union's foreign policy chief met with Chinese Premier Wen Jiabao Thursday and urged him to create a better investment environment for European businesses.

The EU Chamber paper highlights the use of red tape and regulations to bar foreign companies - especially in bidding for government procurement contracts, a key part of China's state-controlled economy.