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EU to China: Open Economy Faster       09/19 06:09

   BEIJING (AP) -- A business group urged China on Tuesday to carry out 
promises to open its economy and warned that inaction might fuel a backlash 
against free trade amid mounting U.S. and European criticism.

   The European Union Chamber of Commerce said in a report that Beijing is 
backtracking in some areas, including by imposing new restrictions on food 
imports, express delivery and legal services. It proposed hundreds of possible 
changes to open the state-dominated economy wider or simplify rules in fields 
from cosmetics to medical devices.

   "The current lack of reciprocity in market access is becoming politically 
unsustainable," the European chamber president, Mats Harborn, said at a news 
conference. "We are worried that if this is not quickly changed, there will be 
a backlash against economic globalization."

   The chamber's American counterpart and other groups have issued similar 
appeals.

   Beijing faces mounting complaints from Washington and the European Union 
about its trade surpluses and barriers to foreign acquisitions of Chinese 
assets while its own companies are buying foreign brands and technology.

   On Monday, the U.S. trade representative, Robert Lighthizer, complained in a 
speech in Washington that Chinese efforts to create industrial champions and 
induce foreign companies to hand over technology threaten the world trading 
system.

   President Xi Jinping, who took power in 2012, and other leaders have 
promised to give market forces a bigger role, treat foreign and Chinese 
companies equally and reduce the dominance of state industry. But reform 
advocates complain little has been done to carry out those pledges.

   A foreign ministry spokesman, Lu Kang, defended Beijing's trade record and 
said it has abided by its market-opening commitments under the World Trade 
Organization.

   "China stays committed to the opening up and reform and lets the market play 
a decisive role in the allocation of resources," Lu said at a regular briefing.

   China is a key market for autos, aircraft, smartphones, cosmetics and other 
goods. But Beijing bars foreign companies from fields including finance, 
telecoms and utilities. In others, companies are required to work through local 
partners that might become competitors.

   The European chamber report noted the Organization for Economic Cooperation 
and Development ranks China 59th out of 62 countries in terms of openness to 
foreign direct investment.

   It appealed for changes in fields from aerospace to cosmetics, including 
opening more industry segments, easing limits on foreign ownership stakes in 
companies and simplifying regulation.

   The president of the European Union's governing body last week announced 
plans to introduce a screening mechanism for foreign investments --- a measure 
widely seen to be directed at Beijing.

   "It seems like it is a well-balanced proposal so far, and we look forward to 
seeing the discussion," Harborn said.

   Also last week, U.S. President Donald Trump blocked a Chinese-financed 
purchase of a U.S. semiconductor maker, prompting suggestions Washington might 
tighten scrutiny of future deals.

   American authorities also are investigating whether Beijing should face 
penalties for pressuring companies to hand over technology in exchange for 
market access. A survey earlier by the U.S.-China Business Council found 20 
percent of companies that responded said they were asked to transfer technology 
within the past three years.


(KA)

 
 
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