Per AP News, foreign companies operating in China say tensions with Washington over technology, trade and other issues and uncertainty over Chinese policies are damaging the business environment and causing some to reassess their plans for investing in China. Results of recent surveys by the American Chamber of Commerce (CoC) in Shanghai and by the EU CoC in China mostly concurred in appealing for greater certainty and clarity over China’s stance toward foreign business. Erratic policy shifts have also hurt confidence in China’s growth prospects.
The American CoC survey showed that just over 20% of companies surveyed said they were decreasing their investment in China this year, with uncertainty about U.S.-China relations and expectations of slower growth in China the primary reasons. Disruptions from zero-Covid policies earlier in the pandemic that caused cities, transport networks and travel to be shut down also played a role.
While 52% of those surveyed by the U.S. CoC said they were optimistic about their five-year business outlook in China, that was the lowest figure since the survey began in 1999. Almost 90% of companies said rising costs were a big challenge. Intensifying competition has also been worsened by policies that favor local companies over foreign ones and courts that tend to favor Chinese companies in decisions on protection of intellectual property such as patents and trademarks, the Chamber said.
Companies that are limiting their commitment to China include those selling technology hardware, software and services, areas hit hard by trade sanctions for national security reasons, particularly by Washington. Others include education and training, areas hit hard by a crackdown on private education companies, and banking and other financial industries.
Southeast Asia ranked as the top choice for the 40% of companies shifting their investments outside China, followed by the U.S. and Mexico. In the 2022 survey, 40% of manufacturers surveyed said that China was among their top three investment destinations, while this year that dropped to 26%.
The American CoC survey echoed results from other sources. A survey by the British CoC in China found 70% of companies want more clarity before making new investments. The EU CoC in China said its members are shifting investments to SE Asia and other destinations.
If you want to diversify your foreign investments in manufacturing or other areas, MOSIMTEC simulation modeling can help. How should you modify your manufacturing strategy? Should you continue to manufacture in China, move to other countries or re-shore to the U.S.? What does it mean for your production levels, capital/operating cost, supply chain, product quality, business risk and other factors? Explore options virtually to see what works, what doesn’t, and the best ways to thrive with such uncertainty. MOSIMTEC data scientists and industrial engineers can help you future-proof your business.
#Manufacturing #Technology #Investment #manufacturing digital twin
Read More: https://apnews.com/article/china-foreign-business-investment-bda87ce8d2ad10a3438d3da7efbff6f9