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Closed Door Policy

How China's Reforms Are Pushing Away Foreign Business

A shopping cart full of products in a Walmart in Beijing, February 18, 2014. Kim Kyung Hoon / Courtesy Reuters

"We shall proceed with reform and opening up without hesitation," said Chinese President Xi Jinping to his country's top leaders at a symposium last month that marked the 110th birth anniversary of his predecessor Deng Xiaoping. At first glance, his pledge appeared sincere. In the two years since taking office, Xi has consistently advocated a reform agenda intended to continue the economic revitalization and restructuring that Deng started in 1978. Xi’s campaign includes plans to reduce government meddling in the economy by making it easier for private-sector firms to compete with state-owned enterprises (SOEs) and allowing companies and individuals to invest and borrow more freely.

At the same time, however, Beijing has become less open to foreign businesses, subjecting them to costly fines, denying their mergers, refusing their applications for licenses, and detaining and deporting their managers. According to a survey conducted in August this year by the American Chamber

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