Foreign companies face rising economic nationalism in China and are watching Coca-Cola's bid for a Chinese juice producer to see whether regulators are swayed by politics, a European business group said Tuesday. Coca-Cola Co.'s $2.5 billion offer last week for China Huiyuan Juice Group Ltd. has sparked criticism in China over the sale of a leading brand to foreigners. State media say the bid must undergo a review under a one-month-old Chinese anti-monopoly law. “We really are watching the ongoing Coca-Cola-Huiyuan case very carefully in order to see whether it is dealt with by the law or is being dealt with in respect to media and public concerns,” said Joerg Wuttke, president of the European Chamber of Commerce in China. Foreign companies believe “the reform process has slowed down” in China and see “economic nationalism is rising,” Wuttke said at a news conference as the group released an annual report on business conditions in China. US and European companies and government officials complain that China is adding to its swollen trade surplus by hampering imports and foreign investment. They say reforms have slowed since 2006, when Beijing completed market-opening moves promised as part of joining the World Trade Organization, leaving regulators without a clear roadmap for more changes. Foreign companies have been shut out of energy and other deals due to lobbying by Chinese rivals that invoke nationalist sentiment to keep out competitors, Wuttke said. He noted that a European company has yet to be allowed to make a major acquisition in China. “Trade barriers and investment hurdles are getting more sophisticated,” he said. In discussions with the Chinese government on setting industrial standards, “foreigners are being excluded more than in the past,” Wuttke said. Wuttke did not identify individual deals or companies, a standard practice for chambers of commerce in China, which want to shield their member companies from possible official retaliation for making disputes public.” Trade analysts say the process of creating standards for mobile phones and other products can be used to favor Chinese companies over foreign rivals.
