BEIJING, Sept 2 (Reuters) - European companies called on Thursday for equal access to China's markets and expressed concern that Beijing is backsliding on regulatory reform.
In its annual position paper, the European Union Chamber of Commerce in China listed a familiar array of barriers that it said were preventing its members from competing with their local rivals on a level playing field.
These include discrimination in favour of Chinese firms when enforcing environmental and labour laws; compulsory certification requirements that unduly restrict market access for foreign firms; and preferential treatment for products containing indigenous intellectual property.
"European companies are still heavily restricted in their investment possibilities in China. When it comes to strategic investments in particular, European investors continue to be heavily constrained in areas ranging from telecom services, to insurance, construction and the automotive industry," the paper said.
The Chamber said less than 3 percent of EU outbound foreign direct investment in 2008 went to China because of the obstacles or risks for European companies of doing business in China.
It gave the example of how foreign-invested enterprises (FIEs) are in practice barred from obtaining a wholesale licence to sell petroleum products.
To qualify, a company must own a refinery and obtain an import licence. But Chinese law limits foreign ownership of a refinery to 49 percent, and no foreign firm has ever been awarded an import licence.
"In other words, it is impossible for an FIE to own a refinery," the report said.
The Chamber said it was encouraged by repeated assurances by Chinese leaders that overseas firms would be treated on par with their local competitors, but it urged the government to consult more closely with foreign business.
Such dialogue is vital if European companies, when they advise their own governments on China policy, are to continue to advocate open markets, the paper said.
"Less protectionism, more fairness in trade and investment in both the EU and China is in European Chamber member companies' clear interest. That is, as long as these benefits are reciprocal," it said. (Reporting by Alan Wheatley; Editing by Ken Wills)