US, EU companies cautious on China investment amid ‘new normal’, chamber officials say
- ‘It’s not an easy decision to say “I want to invest in China” any more,’ says president of American Chamber of Commerce in Shanghai
Foreign companies investing in China have to tread carefully as they face increasing competition from innovative local companies amid a difficult business environment, according to Eric Zheng, the president of the American Chamber of Commerce in Shanghai.
“We have major competitors in China that are doing very well, are very competitive and are highly innovative,” he added.
Zheng’s note of caution comes as Beijing hopes to lure more foreign direct investment (FDI) back to its shores. The government issued a 24-point list of guidelines for economic improvement late last year, including assurances of bolstering R&D in the biotech industry, fast-tracking cross-border data flows, facilitating investment, issuing business visas and offering tax incentives for foreign businesses.
However, some foreign companies remain cautious amid geopolitical tensions between the US and China, heightened concern over trade tariffs and a slowdown in domestic consumption.