For the past 20 years, western and multinational corporations have argued for greater political and commercial engagement with China in the hope of gaining access to the biggest potential market in the world.

But over the past year, a range of foreign companies has accused Beijing of restricting market access and favouring state-owned competitors. This has led some to rethink the policy of unquestioning engagement.

“A less welcoming attitude is alienating big business, which has been the greatest natural ally of the Communist party in the past,” said one western official who works closely with foreign companies in China. “Previously, when politicians in the west wanted to criticise China for its human rights abuses or other issues, multinationals would quietly lobby governments not to make a big fuss. But that appears to be changing.”

Google's threat to quit the Chinese market is an extreme example of this growing frustration.

But it reflects a new mood among foreign companies that are starting to re-assess their tolerance levels when it comes to doing business in an increasingly difficult environment.

“A year ago, this issue would have been dealt with differently but the tone has definitely changed and not for the better,” according to Jörg Wuttke, president of the European Union Chamber of Commerce in China.

The EU chamber observed last year that “operating conditions in the Chinese market have become increasingly challenging”. It noted the most pressing concerns for European businesses included rising Chinese protectionism, lack of market access, lack of legal and political transparency and lax protection of intellectual property rights.

Beijing's rejection last year of Coca-Cola's bid for a Chinese juice-maker on anti-monopoly grounds and a “buy China” policy for government procurement were seen as examples of rising protectionism.

In August multinationals were shocked by the arrest of Rio Tinto executives during sensitive iron ore price talks – a move that was widely perceived as a warning to foreign businesses operating in the country.

In recent weeks, China has been left out of annual iron ore negotiations by global mining companies, in part because of fears of retribution if talks collapse.

In Google's case, a senior executive in China said the company had been subject to increasing pressure over the past year to expand the limited censorship of search results it agreed to implement when it established its Chinese service in 2006.

“We don't think it's only about censorship but also about protecting our domestic Chinese competitors,” the executive told the Financial Times prior to Tuesday's announcement. “We see these demands partly as just another non-tariff barrier.”

Other foreign companies complain about ownership caps for foreign investors in many sectors, selective enforcement of environmental standards, discriminatory technical regulations and certification procedures that limit market access for foreign companies.

In the car sector, for example, while Chinese companies are able to bid for all of Saab, Volvo or Hummer, foreign companies are limited to 50 per cent stakes in joint ventures with local producers.

“The barriers to market entry are making China less and less appealing as an investment destination for European companies,” the EU chamber said.

But despite rising frustration among foreign companies, the Chinese market is too large and growing too fast for most companies to risk the confrontational stance taken by Google.

During a visit to Brussels last May, Wang Qishan, vice-premier, discussed various issues of concern with European officials.

According to someone at that meeting, Beijing's concerns covered four requests: that Europe keep its markets open, lift an arms embargo, recognise China as a market-based economy and grant visas more easily to Chinese citizens.

The European delegates had to distil a 300-page report down for their presentation but when they came to the end, Mr Wang's response was dismissive: “Whatever you tell me doesn't really make a difference. You are going to invest in China anyway.”