2023-06-21 15:12:47
China is becoming a risky destination for investors.
Concerned by Beijing’s push for national self-sufficiency, with the government pressuring manufacturers, hospitals and others to use Chinese suppliers even at higher costsforeign corporations are moving Asian investments and headquarters out of China.
Also an expansion of an anti-espionage law and other challenges have made it difficult for companies to maintain their operations in the country, according to the European Union Chamber of Commerce in China.
China is becoming a risky destination for investors.
China, a dangerous investment destination
The report also highlighted that foreign companies are concerned about security controls, government protection from their Chinese rivals and a lack of action on reform promises, according to the European Chamber. They are also being pressured by slowing Chinese economic growth and rising costs.
Business confidence in China is “virtually the lowest we’ve ever recorded,” European Chamber President Jens Eskelund told reporters ahead of the report’s release.
“There are no expectations that the regulatory environment will really improve in the next five years”said Eskelund.
President Xi Jinping’s government, trying to shore up economic growth that plunged to 3% last year, is trying to encourage foreign companies to invest and bring in technology.
But they are worried about security rules and plans to create competitors for global providers of computer chips, commercial aircraft and other technology. That often involves subsidies and market barriers that Washington and the European Union say violate Beijing’s free trade commitments.
Two-thirds of the 570 companies that responded to the European Chamber survey said doing business in China has become more difficult, up from less than half before the pandemic. Three in five said the business environment is “more political”, up from half the year before.
Last month, China banned the products of the largest US memory chip maker, Micron Technology Inc., in computers that handle sensitive data. He said Micron had unspecified security flaws, but gave no explanation.
A separate group, the British Chamber of Commerce in China, said last month that its members were waiting for “greater clarity” on anti-spying, data security and other rules before making any new investments.
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