Beijing needs to speed up economic reform and curb the dominance of state companies or risk an economic slowdown and a possible crisis, the biggest European business group in China said Tuesday.
The report by the European Chamber of Commerce in China adds to warnings that Beijing needs to open the state-dominated economy and not use regulation to promote growth of Chinese industry.
It comes while Chinese authorities are conducting a series of anti-monopoly investigations of global auto and technology brands that business groups say unfairly target foreign competitors. Premier Li Keqiang was quoted by the official Xinhua News Agency as telling attendees to a World Economic Forum in Tianjin that foreign companies only accounted for 10 percent of companies involved in recent anti-trust investigations and that no specific companies or industries were being targeted.
With economic growth slowing, China “needs a whole new era of reform,” said the chamber president, Joerg Wuttke. He said the pace of reform under President Xi Jinping has been “too slow and cautious.”
Beijing’s economic overhaul plan announced in 2013 plan calls for making China’s economy more productive by opening more industries to private and foreign competition. But at the same time Beijing is trying to create “national champions” in fields from autos to telecoms to aerospace. Political analysts say the most ambitious reforms might also have been hampered by resistance from state industry and its allies in the ruling party.