Foreign Companies are Facing a Worsening Business Environment in China

As a major importer and exporter, China has drawn many foreign companies to explore the unique development vitality and potential of this mysterious eastern power. However, surveys show that fewer Americans are coming to China to explore business, and many foreign executives have left China during the pandemic and have never returned.

Complex Business Environment Might be the Cause

European companies are also worried that China’s de-risking policies can allow companies to survive on local resources and escape the need for imports. In the final analysis, the reason why many foreign companies are holding back is China’s complex business environment.

Geopolitics and the global economic slowdown have made it difficult for foreign companies to deal with the irreplaceable advantages of the scale growth of the Chinese market, and on the other hand, the Chinese government’s national security supervision has become increasingly difficult for foreign companies to deal with. Even as Chinese government officials have openly sought investment from foreign executives, the Chinese government’s relentless push for national security and independence has left foreign companies feeling overwhelmed.

Eric Zheng, president of the American Chamber of Commerce in Shanghai, said the company’s restrictions on employees taking laptops out of China made the process of managing the business difficult.

Chinese Economy at a Crossroad

During a period of intense but critical business development, China’s fate hangs in the balance. Jen Eskelund, president of the European Union Chamber of Commerce in China, said that the two major choices stand impressively: self-reliance and national security, or further development and participation.

At present, China’s rules and regulations issued by foreign companies are relatively vague, and the definition of red lines is a big stone in the minds of foreign company executives. Even as foreign executives face pressure, negativity has not overwhelmed optimism in Western companies. Companies say they will increase their investment in China if geopolitical tensions ease. Under the wave of globalization, a good qualification bureau is a large, medium and small foreign-funded enterprise. It is expected that during the period when major projects drive the leading long-distance running, many small foreign companies will also follow the development trend and continue to leap into the long river of the times.


Ivy Wu

Ivy Wu was a media reporter at btw media. She graduated from Korea University with a major in media and communication, and has rich experience in reporting and news writing.

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