China: The New Reality Includes Increasing Barriers to Entry for Foreign Companies

It gives me great pleasure to see the boys at the Wall Street Journal report today on a state of affairs I wrote about several months earlier regarding the increasing rather than decreasing barriers and difficulties facing foreign companies who wish to venture into China. Last year’s European Commission annual report on business conditions was a scathing expose’ on less transparency, higher barriers to entry and increasing difficulty even with obtaining a business visa to visit China exploring business ventures and opportunities. It is no surprise to find that the soon to arrive report by the American Chamber of Commerce in Shanghai will cite similar sentiments as we traverse 2010.

Wall Street Journal Article Excerpts:

BEIJING—China’s relationship with foreign companies is starting to sour, as tougher government policies and intensifying domestic competition combine to make one of the world’s most important markets less friendly to multinationals. Interviews with executives, lawyers, and consultants with long experience in China point to developments they say are making it much harder for many foreign companies to succeed. They say the changes suggest Beijing is reassessing China’s long-standing emphasis on opening its economy to foreign business—epitomized by the changes it made to join the World Trade Organization in 2001—and tilting toward promoting dominant state companies.

Consider the following statement from my Sanya, Hainan Island 3rd Quarter 2009 Real Estate Report

“Looking more broadly beyond the real estate market, we can also sense there is a strong case of bias emerging from Chinese big business to subtly push foreigners out of China, as they come up with one big event excuse or another (Beijing Olympics, 60th National Day Anniversary, next the Shanghai World Expo) to severely limit visa permissions and make it harder to do business according to the recent scathing European Commission Annual Position Paper. The Chinese are perhaps starting to enjoy their little victory party as they seem to be the pied piper leading the world out of its economic crisis. America is cash broke. Europe is cash broke. Asia is flush with cash starting with China. That’s the economic reality and in fact we should appreciate its importance and value.” Mario Cavolo

Business Sours on China at WSJ

Read the original story at Mario Cavolo