The European Union Chamber of Commerce in its first position paper for Shenyang, the capital of Liaoning province, also listed burdensome governance, a loss of skilled workers, an uncompetitive work visa and permit system, limited options for international education and poor air quality as factors that have reduced the city’s ability to attract foreign investment. If no improvement is made, Shenyang may “risk losing out on potential foreign investment to other Chinese cities”, the Chamber’s report said.

“Instead of continuing to engage in high-level discussions and developing more broad policy goals that merely scratch the surface, the city needs to dig deep and plant the seeds of reform,” it said. The assessment comes amid a debate over how to improve economic performance in this heavy manufacturing region. The Chamber’s report detailed the “day-to-day challenges and opportunities” foreign businesses in the city face while painting a broader picture of the difficulties they encounter when doing business in China’s rust belt.

The Chamber, which opened its Shenyang office in 2007 and has 49 local members, said the lack of clarity, transparency and trust in policymaking and enforcement in Shenyang have created uncertainty for foreign companies.

Owing to the market’s size and growth potential, European companies “have accepted the uncertain nature of governance in Shenyang for several decades,” according to the Chamber’s report. Companies, however, are “increasingly intolerant of poor governance, the lack of transparency in policy making and inconsistent enforcement of regulations”. Companies also reported a lack of clarity regarding which government departments had authority over a given issue, the South China Morning Post reports.