Australia, the world’s most China-dependent developed economy, invests more in the obscure South Pacific nation of Papua New Guinea than it does in its biggest trading partner. Part of the reason for such an imbalance is corporate Australia’s long history of failure abroad, which deters boards from venturing beyond their often cozy oligopolies at home. Yet when it comes to China, there’s also reason to be circumspect. “It’s a high-risk area,” said Alan Oxley, a former Australian trade negotiator, citing problems with corruption and difficulties maintaining business relationships in China. “Those that do go in frequently find themselves pressured to share patents.”  Market access is becoming a global flashpoint as China shifts from being the honeypot for businesses eager to plug into its vast manufacturing value chains or sell cafe lattes to its 1.3 billion people to being a net acquirer of companies, commodities and real estate. The most recent spark: The U.S. said this month it will investigate whether Beijing is violating international trade law by forcing foreign firms to hand over intellectual property. “When it comes to investment, the playing field in China is as level as a ski jump,” said David Loevinger, a former China specialist at the U.S. Treasury and now an analyst at fund manager TCW Group Inc. in Los Angeles. “Chinese companies have been buying up market leaders abroad, like Shuanghui’s takeover of Smithfield. That could never happen in China.” The purchase of Smithfield Foods Inc. by Shuanghui International—now known as WH Group Ltd.—ranks as one of the largest Chinese takeovers of a U.S. company. European Grumbles It’s not just the U.S that’s making noise over access. In November, Germany’s Economy Minister Sigmar Gabriel urged China to open its borders to foreign investment in response to the growing backlash in Europe’s biggest economy to a wave of Chinese investment.  Indeed, European companies in China are increasingly frustrated with the authorities. They’re reporting unfair treatment compared with domestic firms in areas such as environmental rules being enforced strongly on foreign companies and less so against domestic ones, according to a survey released by the European Union Chamber of Commerce in China and Roland Berger Strategy Consultants. “Chinese companies face few, if any, limitations in investing in European industries like construction, healthcare, insurance, logistics and media, yet European companies in China continue either to be fully barred from participation or limited to holding a minority position,” it said. The money trail backs that view: While in 2016 Chinese investment in the European Union jumped 77 percent year-on-year to more than 35 billion euros ($42 billion), European investment into China dropped by 23 percent to only 8 billion euros. Rio, Crown Australian executives have run into more than just access problems. Stern Hu, who led Rio Tinto Group’s China iron ore unit, was sentenced to 10 years jail in 2010 after he was found guilty of taking bribes from steel mills and infringing commercial secrets. In June, a Shanghai court convicted 19 current and former Crown Resorts Ltd. staff of illegally promoting gambling on the mainland. Hu and the Crown staff have all been released. Australian investments in Papua New Guinea, a former colony whose highland region is so remote that some villagers didn’t come into contact with Europeans until the 1930s, center mainly around energy and minerals. Australia’s largest investment in the nation is in a project that started shipping liquefied natural gas in There are plans to double production by at a cost upwards of billion. In 2016, Australian foreign direct investment into Papua New Guinea totaled A$15.8 billion ($12.6 billion) versus A$13.3 billion into China. By contrast, Australia’s two-way trade with China totaled $117.3 billion last year, versus $4.7 billion with Papua New Guinea, according to International Monetary Fund data compiled by Bloomberg. A report this month showed two-thirds of board members in ASX 200 companies have no extensive experience operating in Asia, while more than half demonstrate little to no knowledge of the region’s markets. While it may lack businesses on the streets of Beijing, Australia has nonetheless been boosted by China’s industrialization, which fueled a boom in demand for raw materials such as iron ore. In late 2014, the two nations signed a trade deal designed to drive exports beyond commodities—while services account for about 70 percent of Australia’s gross domestic product, they made up just 17 percent of exports at the time. Design Flaw Part of the imbalance in market access stems from the fact that investment arrangements with China were accepted when it joined the World Trade Organization in 2001 and at the time was still a poor, developing country, according to David Dollar, a senior fellow at the Brookings Institution in Washington and a former U.S. Treasury attache in Beijing. “To persist in these practices now that China is the biggest trading nation and the world’s second-largest economy is undermining the global trading system,” he said. “In addition to these forced technology transfers, there are other, more out-right thefts of IP by Chinese actors. IP protection in China, however, is improving and the specialized IP courts have turned in many decisions favorable to foreign IP holders.” As China seeks to make the leap to being an advanced economy, self interest may spur efforts to protect intellectual property and open up more sectors to foreign investment and competition. Authorities will “severely” fight against fake or counterfeit products, Premier Li Keqiang said at a weekend seminar on upgrading the manufacturing sector. But for now at least, many parts of China’s economy remain largely off limits. “China would like to “select” foreign investments that are valuable to the economy,” said Iris Pang, an economist at ING Bank NV in Hong Kong. “China’s authorities want to make sure that foreign firms coming in do not just make a profit and go away. They need to create value for the economy, not only by creating more jobs.”