China's evolutionary road

The growing competition for China's limited pool of highly skilled workers and the country's new stringent regulations are creating major obstacles for foreign companies in China, says Stuart Fuller, global managing partner at King & Wood Mallesons.

"You have to step back and look at the profound changes happening across China economically, in a government sense and in society," says Fuller, who added that many of the challenges facing foreign enterprises today were hard to imagine five years ago.

A report by the global law firm last month, called Doing Business in China, quotes a 2013 survey by the American Chamber of Commerce in China that says labor costs and a shortage of qualified employees continue to be the key challenges for foreign businesses.