China’s ‘reform deficit’ lamented

Beijing: Foreign companies cannot compete on a level playing field in China because the world´s second-largest economy is stuck in a "reform deficit", a European business group said Tuesday.

Despite four decades of booming growth, Beijing has fallen behind on pledges to implement reforms and liberalise its economy, the EU Chamber of Commerce in China wrote in its annual report. The comments come as China-US trade tensions fray, with Donald Trump on Monday announcing new tariffs on $200 billion in Chinese goods that will take effect next week.

"The root cause of the US-China trade war is China´s incomplete market opening," said Mats Harborn, president of the EU Chamber. "Reducing the reform deficit should also help with reducing tensions in the ongoing trade war," he added.

The 394-page position paper details the problems EU firms face in China, and represents the voices of 1,600 European companies, including big names such as Siemens, Volkswagen and Airbus. The chamber said it received "a clear no" when it asked members whether international companies compete on a level playing field in China. European firms face myriad issues in China, the report said, including preferential treatment for monopolistic state-owned companies, market access barriers and government red tape, as well as intellectual property protection and forced technology transfer.