Trade war, intellectual property theft among top risk worries for companies in China, Kroll report finds

Geopolitical concerns including the trade war and intellectual property theft are some of the biggest risks for corporate executives operating in China, at both domestic and multinational companies, according to a new report by corporate investigations and risk consultancy Kroll.

More than three quarters of companies operating in China said in Kroll’s annual Global Fraud and Risk Report that they were affected by the trade war that has raged for more than a year between Washington and Beijing, including the tariffs put in place by both countries. By comparison, just over half of executives surveyed globally said their companies were affected by the trade war.

Executives in China also cited restrictions on foreign investment and changes in economic treaties as major geopolitical risks that have affected their companies in the past year. About 85 per cent of Chinese companies prioritised mitigating the risk of disruption due to sanctions, tariffs and trade agreements – much more widely than do enterprises in any other country, Kroll said.

“The [Sino-US ] relationship over the past few decades has been quite positive. That has shifted to almost uncharted territory with the ongoing trade war,” said Violet Ho, Kroll’s head of Greater China. “We have not really seen companies coming up with very meaningful solutions on this – other than that they’re aware of it and they’re trying to address it on an ongoing, tactical basis. I think in the bigger picture of where this is going, that remains a concern, rather than a foregone conclusion.”

Forrester Consulting, on Kroll’s behalf, surveyed 588 senior executives who are responsible for risk management at their firms between March and April. Respondents came from 13 countries and 10 industries, with 92 per cent of the organisations operating in more than one country.