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EU lobby warns China of investment backlash

Thursday, September 01, 2016 - 01:47

The EU business lobby in China has a thinly-veiled message for Beijing in its annual white paper: open up your markets or you won't have free access to ours for much longer. The memo comes at an awkward time as China gears up to host the G20. Graham Mackay reports.

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"Highly disappointing" and "not politically sustainable"... Strong word's from the EU's Chamber of Commerce in China on Thursday - in it's annual report. The group says Beijing needs to open its markets significantly to foreign investors. (SOUNDBITE) (English) REUTERS REPORTER, MICHAEL MARTINA, SAYING: "Chinese leaders have repeatedly pledged to carry out market reforms and improve access for foreign companies, but business groups argue that the momentum behind those reforms has all but stalled, and in some cases we're seeing movement in the opposite direction. There's a growing sentiment within Europe that China can't expect continued, largely unfettered access for its companies in the EU if it doesn't reciprocate in allowing European companies to invest in China." For its part, China has been unhappy with certain deals in the west - like the delay of 24 billion dollar nuclear project in Britain, led by Chinese investors. Beijing says that smacked of protectionism. But the EU business lobby says foreign investors trying to put money into China often have to deal with far bigger hurdles. Beijing is no stranger to brushing off criticism from the west. But this report comes at an awkward time - with the world's most powerful leaders all heading to China this week. (SOUNDBITE) (English) REUTERS REPORTER, MICHAEL MARTINA, SAYING: "The Chamber is obviously aware of the G20 summit, where issues of protectionism and overcapacity are likely to weigh heavily on the agenda. And it no doubt sees this as an opportunity to join in and shape the discussion among leaders there." As far as western powers are concerned that discussion will be relatively simple. China's been on an overseas spending spree for years. But unless it's prepared embrace investment from abroad, its window into European markets could soon start getting smaller.