Uncertainty over regulatory conditions adds to challenges for foreign companies at a time when China's growth is slowing and they face competition from ambitious local rivals. Growth of 7. 5 per cent in the three months ended in June was barely half of 2007's rate of 14. 2 per cent. "Companies are increasingly cautious about future investments," it said.
Foreign companies used to have a "sense of co-operation" with regulators but believe that has changed over the past two years, said Kim Woodard, a former vice chairman of the American chamber. "Now, what's happening is you have aggressive enforcement actions against selected companies," said Woodard. "That starts to look like another barrier to market access.
They point to actions such as fines last year against two Chinese liquor producers for price-fixing. "We believe the fairness of the law enforcement will be better reflected as the number of cases increases," said the director of the anti-monopoly bureau of the Cabinet's planning agency, Xu Kunlin, in comments on Tuesday in the China Daily, an English-language newspaper aimed at foreign readers.
Almost half of companies that responded to a survey last week believe they are targeted for "selective and subjective enforcement" of anti-monopoly, food safety and other rules, the chamber said in a report on Tuesday.
Foreign companies in China feel increasingly targeted for unfair enforcement of anti-monopoly and other laws and might cut investment if conditions fail to improve, a US business group says.
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