Despite an improvement in many aspects, little has been done in the business arena, president of the US-China Business Council Robert Kapp said.

The re-organisation of the Chinese government, launched by premier Zhu Rongji in March, has led to administrative confusion and worsening bureaucratic immobility, making navigation difficult for businesses, Kapp wrote in the China business review.

A tightening of foreign exchange procedures aimed at stopping smuggling and illegal movement of money offshore has resulted in a backlash on foreign firms seeking to claim legitimate foreign-exchange earnings from exports, said a report in South China Morning Post.

New measures adopted to business development.

"There is an almost palpable sense that China is moving away in the short run from more energetic business relations withAmerican firms. The mood of the business community on the ground appears both more sombre and impatient than before," Kapp wrote.

The Asian crisis has been another factor affecting foreign firms in China, as market-opening measures go on hold, and Beijing attempts to maintain a targeted economic growth rate of eight per cent for the year, by showing signs of dangers of excessive rapid liberalisation.

After Hong Kong and Taiwan, the US is the biggest foreign investor in China with more than 25,000 projects and $28 billion in actual investment.

US is China's second-biggest trading partner whereas China is fourth in the ranks of US trade partners.

However, US firms are angry with the limited extent of Beijing's market-opening moves - especially in sectors in which they enjoy competitive advantage, such as telecommunications, insurance, banking and farm goods.

China has reportedly given up hope of entering the World Trade Organisation (WTO) in the short term, relieving it of fulfilling requirementsto open its market in many of these sectors.

Meanwhile, in the hunt for a $10 billion increase on last year's $50billion trade surplus, it has increased exports to the US this year to make up for markets lost in Asia with negligible rise in imports from US.

China has also taken measures against US investment, such as a ban on direct sales, which had a bad impact on companies like Amway and Avon, an end guaranteed returns on power projects and foreign investment in telecommunications.

Kapp said US business must make clear that a continual deterioration of the investment and commercial climate for US firms in China would be adverse to the growth of bilateral commercial relations and that this would ultimately pollute other sectors of the relationship.

The formation of a new US congress in January will find much of it unfamiliar with Sino-US relations, turning more of an eye towards a looming presidential election in 2000, he said.

"Broadly speaking, foreign relations tend either to recede fromprominence in the face of more immediate domestic issues," he wrote.

The US-China Business Council groups 280 US firms operating in China, and works to promote bilateral trade and investment.

It also lobbies in Washington for Beijing to maintain most-favoured nation (MFN) trading status.