Members of the American Chamber of Commerce group urged China on Friday to allow more access to its insurance and other service industries, saying foreign skills could help develop its volatile stock markets and cope with disasters like the recent chemical explosion in Tianjin.
Opening largely closed banking, logistics and other markets wider to foreign competitors would support the communist leadership’s effort to nurture service industries and reduce reliance on trade and investment to drive economic growth.
The group’s deputy chairman, Lester Ross, pointed to China’s stock market plunge and the Aug. 12 explosion in Tianjin that killed at least 145 people, and said bringing in more global expertise could help to develop financial markets and reduce the impact of disasters.
“Our hope, frankly, is that the downturn in the market will encourage the Chinese government to open faster,” Ross said at a news conference in China.
In a report, the Chamber also cited potential opportunities in fields including engineering, health care, communications technology, legal services, real estate, entertainment, online commerce and logistics.
The report is part of an annual series but its release comes at a time when stock market turmoil and unexpectedly weak export and manufacturing data have fueled concerns about the health of China’s economy. That has prompted urging from economists for Beijing to move faster on promised reforms aimed at making the economy more productive by opening state-dominated industries to private and foreign competition.
Despite promises of reform, foreign service businesses are “pessimistic about the regulatory environment,” said the Chamber’s chairman, James Zimmerman.
Ross said China’s insurance industry, with a history of just 35 years, lacks the experience of foreign insurers at spotting potential risks and encouraging policyholders to reduce them. “The more of that China has, the less likely it would be that it’s going to have casualties and disasters like those we have recently seen,” he said.
Zimmerman said Beijing should take action on its own without waiting to complete talks underway with Washington on proposed bilateral investment treaties that are expected to lead to further market opening. “For the Chinese economy’s own good, they need to move faster,” he said.
The Chamber also expressed concern about the impact of proposed Chinese anti-terrorism and cybersecurity laws that companies worry could restrict market access for a wide array of foreign communications, computer and other technology.
The number of telecommunications services open to foreign investment is “very, very limited,” and the government’s “exaggerated concern about security” could reduce access further, Ross said.
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