Immigration rules restrict business opportunities

Businessmen and expatriates from 40 countries are being hit hard by new visa regulations ahead of next month's Olympic Games.

Chinese security personnel single out passersby for a security check near Tiananmen Square in Beijing.

BEIJING // Businessmen and expatriates from 40 countries, including several in the Middle East, are being hit hard by new visa regulations issued by China ahead of next month's Olympic Games. China says the new rules, which came into effect in April, are intended to protect against "hostile forces" hijacking the Games, a veiled reference to separatist Muslim Uighurs, the banned Falun Gong spiritual group and westerners protesting human rights abuses in Tibet.

But they are also causing confusion, as citizens of the 40 countries have been told they will no longer be able to renew their visas while in China, and must first return home. Additionally, short-term China visas are proving difficult to get in neighbouring Hong Kong for any nationality, a move expected to have serious repercussions for those used to shuttling across the border between Hong Kong and their factories in southern China.

"Business people from Dubai visiting Hong Kong for a trade fair might meet Hong Kong or Chinese business people who then suggest a visit to the factory across the border in mainland China. Before, it was possible to arrange such visits because picking up a visa was easy. Now, that flexibility is gone," said Christopher Hammerbeck, executive director of the British Chamber of Commerce in Hong Kong.

On the list are several countries in the Middle East, including Saudi Arabia, Bahrain, Egypt, Lebanon and Iraq; as well countries in South Asia, such as India, Pakistan and Bangladesh and African nations. The UAE is not on the list. "There is a list of countries and people from these countries cannot renew their visas in China - they have to go home to do it. It is a big problem," said Aram Tahir, the 26-year-old manager of Mateen, an Iraqi air freight company which has just opened an office in Yiwu, Zhejiang Province - a city whose commodity markets are popular with Arab traders.

Mr Tahir said he was one of the lucky ones - he got his visa just before the restrictions came into force. "Now very few people are visiting - it's not the same as last year and it's because of the visa restrictions China has put on," said Said al Nagdi, 25, who runs Al Meida, a popular Arab restaurant in Yiwu. Trade between China and the Arab world is expected to reach US$100 billion (Dh367bn) within two or three years, Amr Moussa, secretary general of the Arab League, said at the China-Arab Cooperation Forum in May this year.

But as well as hampering trade, the restrictions have left China's two major cities of Beijing and Shanghai feeling strangely empty in the run-up to the Olympics, due to begin on Aug 8. Beijing had been forecast to receive more than $4bn in extra revenue thanks to an anticipated influx of 500,000 foreign visitors visiting the city for the Games. Instead hotels are slashing their rates by up to half as rooms remain unbooked, according to China's largest online travel service website, Crip.com.

Wei Wei, the director of China's foreign ministry consular department, told the state-run Xinhua News Agency last month that security was the top priority in preparations for the Olympics. It has denied the visa restrictions are in any way different to other countries that have hosted the Olympics. In April, China's public security ministry reported several failed plots to disrupt the Games, including poison gas and bomb attacks on hotels and government offices in Beijing and other cities, and kidnapping foreign athletes and spectators. China has attributed most of these plots to separatist Uighur Muslims in its western Xinjiang region.

But China is also anxious to avoid embarrassing protests on a range of issues by human rights groups during the Games. Analysts said that the new visa regulations may be inconvenient for foreigners now, but in the end it will be Chinese businesses that suffer. Paul French, the founder of the Shanghai-based market research company, Access Asia, said the restrictions, which come on top of rising transportation costs and new labour laws in China, might finally tip companies into moving operations out of China and closer to home.

"The fact is that many Chinese manufacturers have survived and absorbed energy costs, rising transport costs, high input and commodity costs, soaring freight costs, rising wage bills and new labour laws. But they may not be able to survive the actions of the Chinese visa issuing department." * The National