Foreign companies doing business in China are seeing stronger cooperation with the government recently, said a top executive of the European Union Chamber of Commerce in China.

For months, complaints about China's business climate have been mounting, which have attracted policymakers' attention.

Premier Wen Jiabao and Commerce Minister Chen Deming have reiterated China's commitment to its opening-up policy and said the country will open wider for foreign investment in the future.

"They are all certainly encouraging signs," said Jacques de Boissson, president of the European Union Chamber of Commerce in China.

"We did observe an increase in the level of dialogue between industry and government lately," De Boissson said to China Daily.

The Chinese market remains attractive to foreign businesses, and according to the chamber's latest Business Confidence Survey 2010, about 96 percent of companies stated China is an important or more important market in their global strategy since the financial crisis.

A full 70 percent of companies indicated they plan to expand investment and increase hiring in China. And approximately 50 companies predicted that they will increase permanent employee positions in the next two years.

"The majority of our member companies are present in China to serve the internal market and they are very clear about the growth opportunities and willing to invest further," De Boissson said.

However, De Boissson said its member companies are facing obstacles including rising costs, regulatory unpredictability, cumbersome registration processes and protection of intellectual property rights

European companies invested 5.3 billion euros ($6.83 billion) in China in 2009, up from 4.7 billion euros in 2008, which makes up about three percent of all European foreign direct investment (FDI). "Improvements in the regulatory environment would certainly boost growth of the EU's FDI in China," said De Boissson.

"We should admit China has loopholes in its policies and investment environment, but the nation never changed its policy of utilizing foreign investment," said Zhang Yansheng, a researcher at the National Development and Reform Commission.

"The direction of reform is creating a fair and competitive environment for all companies, not merely for foreign companies, but also for domestic companies," he said.

The chamber said fewer companies are reporting profits in China. In the first half of the year, about 59 percent of survey respondents reported a net profit in China in the first half of the year, down from 63 percent in 2009 and 70 percent in 2008, according to the survey.

Li Zhongmin, an investment research fellow with the Chinese Academy of Social Sciences, said the figures are quite positive compared with most overseas markets that have yet to be recovered.

"Foreign companies are facing a changing rather that a worsening environment in China as the market is becoming more mature," Li said.

China had abundant and cheap labor forces but lacked capital when it started opening-up. But now the labor market is getting tighter and the country has sufficient capital, so foreign investments, without technical and managerial advantages, are less welcome in China.