China rust belt opens door wider to foreign investors

Trucks carrying hi-tech car components rumble in and out the gates of an American industrial zone in the heart of China's rust belt -- using roads that the city especially renovated for the complex.

While foreign firms complain about being locked out of large swathes of China's vast market, the door has cracked open a bit wider in northeastern Liaoning province as the authorities seek to revive the recession-hit industrial region.

The bustling activity at the Shenyang American Industrial Park, which hosts international suppliers for global car brands, stands in contrast with the darkened windows and empty parking lots of the moribund Chinese factories nearby.

Foreign firms feel more welcome in the provincial capital, Shenyang, and in parts of the southwest, than anywhere else in the country, according to a survey by the European Union Chamber of Commerce in China.

"The local government offers many benefits, such as easing company registration, providing discounts for factory and office space and giving family members three-year visas," said Harald Kumpfert, chairman of the EU chamber's Shenyang chapter.

Elsewhere, companies are increasingly voicing frustration about investment barriers in sectors from automotive to finance, while China subsidizes its own domestic businesses.

The EU business chamber issued an annual report last week saying companies were "suffering from accumulated 'promise fatigue'" as the government has yet to follow through on pledges to open the market.

And while Liaoning is more welcoming, Kumpfert said that after setting up shop, businesses in Shenyang face similar obstacles, including lengthy waits for permits and "unclear" regulations.

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