"Every country in the world has certain degree of protectionism acts to protect their own industries, and China has long been acting under the rules and regulations of the WTO. Therefore China is not over-protecting its industries," he says.

Bernhard Hartmann, director of Greater China for international management consultants AT Kearney, based in Shanghai, who specializes in the power and utility industry sectors, says it can be a very difficult market for foreign companies because of constant changes in regulations.

"What we see in China is an uneven playing field in may areas. You can have a brutally volatile market with the cards massively stacked against you," he says.

He believes arguments that suggest the United States or Germany was much more protectionist more than 100 years ago just don't relate to the 21st century world.

"You can make the argument but it just doesn't count for much. In the 19th century there was no global economy and it was a totally different environment altogether. You cannot draw any conclusions from that whatsoever," he says.

Hartmann says it is clear China wants to avoid some of the mistakes made by eastern European countries after the collapse of the Soviet Union.

"In many countries you had a complete sell out of strategic industries. In Hungary, in particular, western power companies swallowed the whole infrastructure. This is something China will not let happen," he says.

One of the most protected sectors in China is banking and financial services. No foreign bank can own more than 20 percent in a Chinese bank or 25 percent collectively with other foreign banks.

Nonetheless, a number of European banks have built stakes in Chinese banks, most notably HSBC's 20 percent holding in Bank of Communications, one of China's top five banks.

Some have ambitions to build branch networks in China but each is limited to opening just three a year under restrictions.

"If you can only open three branches a year, it is difficult to know how you can compete against ICBC, for example, which has 25,000 branches across the country," says Loechal.

"I think you have to take into account the development stage of China. If you opened up the market and said the foreigners could invest in what they wanted, it would be an unequal battle for the Chinese banks."

Tao says the odds can be heavily stacked against foreign firms in China.