Foreign companies operating in China are navigating a complex landscape marked by economic uncertainties, geopolitical tensions, and evolving regulatory environments.
A recent survey by the British Chamber of Commerce in China revealed that 70% of foreign companies are seeking greater clarity before committing to new investments. Similarly, the American Chamber of Commerce in China reports that optimism among U.S. businesses regarding China has hit record lows.
The top concerns highlighted by 60% of the 325 corporate respondents include U.S.-China tensions and China's economic slowdown. Additionally, unease about China's regulatory environment has increased, with incidents of fines and raids raising perceptions of risk. However, many respondents attribute the pressure to decouple more to U.S. government policies than to China's actions.
Despite these challenges, there remains a silver lining. 52% of U.S. firms are optimistic about their five-year business outlook in China. Companies like Apple and Tesla continue to thrive, with the new iPhone 15 experiencing rapid sales and long queues. On the European front, 55% of German companies plan to boost their investments in China over the next two years, according to the German Chamber of Commerce in China.
From China's perspective, foreign companies bring essential technology and expertise, enhancing the competitiveness of Chinese markets and making them more responsive to consumers. By demonstrating an open market, successful foreign businesses help counter claims that China is restrictive towards foreign products.
The State Council of China has prioritized attracting foreign investment to promote new-type industrialization, focusing on advanced manufacturing, supply chain security, and breakthrough technologies. To support this, China has introduced 24 policies aimed at creating a market-oriented, legalized, and internationally competitive business environment. These measures include ensuring equal treatment for foreign-invested enterprises, strengthening investment protections, and increasing fiscal and tax support.
Premier Li Qiang has emphasized facilitating foreign companies as a key part of his agenda. At the World Economic Forum in Tianjin, he urged multinational corporations to engage with China's sci-tech innovation sectors, highlighting the vast opportunities available as China modernizes its industrial system and boosts domestic demand.
Pan Gongsheng, governor of the People's Bank of China, reaffirmed China's commitment to opening its market to global businesses, contrasting it with the restrictive investment activities being promoted by the U.S. and its allies. Pan engaged with global financial institutions to discuss expanding market access for foreign financial services and addressed key issues raised by foreign enterprises.
The American Chamber of Commerce continues to encourage U.S. companies to invest in China, emphasizing that organizations willing to embrace challenges are best positioned to serve their customers and stakeholders effectively in a turbulent world.
Reference(s):
cgtn.com
