China's upcoming political changes represent a breakthrough chance to boost its economy by accelerating reforms and fostering innovation, a European business group said Thursday.

The Communist Party is slated to carry out a once-in-a-decade revamp of top officials in coming weeks with Hu Jintao stepping down as general secretary before resigning as the country's president in March.

Current Vice President Xi Jinping is widely expected to replace Hu in both posts in the highly choreographed handover, but China's new generation of leaders face the challenge of kick-starting a slowing economy.

"On the eve of a generational leadership transition, China holds a historic opportunity to raise its economy to a new level," the European Union Chamber of Commerce in China said in its annual report.

"To achieve this, a prompt and fundamental shift is required to carry out necessary economic rebalancing," it said.

The EU Chamber noted that China itself in its latest five-year economic plan has understood the need to reset its growth model from state-led investment to one in which market principles are dominant.

"But meaningful implementation has been lacking," it added.

The Chamber and other foreign business associations have long called for China to reduce and remove obstacles for investing in the world's second-largest economy.

Among problems highlighted by the Chamber in its latest report are regulatory barriers to market access, artificially low interest rates and subsidies for domestic businesses, and discriminatory standardisation policies.

"Rebalancing the economic growth model requires equal access for all companies," it said, including foreign-invested ones.

EU Chamber Davide Cucin said it is important for Beijing to remove barriers to foreign companies that can offer the kind of innovation China needs.

"You cannot go into a green field and try to find innovation in the soil," he said. "The innovation comes from countries which have developed innovation for ages."

The group's call for openness comes as China's economy has slowed significantly since last year owing to domestic and overseas woes, including the European debt crisis that has had a huge impact on the country's exports.

China's economy grew 7.6 percent in the three months to the end of June, its worst performance in three years.