China’s ‘erratic policy shifts’ have some companies wondering how much more they can take
- From local subcontractors to multinational corporations, companies in China are struggling to make sense of the business environment
- Private and foreign investors are waiting for policy signals at the coming 20th party congress, which will usher in a new generation of leaders
Months after Shanghai lifted its crippling, 60-day Covid lockdown, the event continues to haunt foreign businesses in China.
Multinationals like holiday rental giant Airbnb have shut operations in the country, while a growing number of surveys by foreign business groups show European and American firms are planning to move investment elsewhere.
Overseas investment projects are tumbling. In Shanghai, they fell 20.3 per cent between June and July from a year earlier, according to the city’s statistics bureau. In April, the month the commercial hub of 25 million people was shut down, new foreign investment ventures numbered just 13, from 305 in March.
Such is the uncertainty hanging over the world’s No 2 economy. From local subcontractors to multinational corporations, companies in China are struggling to make sense of the business environment.
The outlook – both at home and abroad – is looking increasingly gloomy.
It seems that the old economic rules are being broken
Aggressive rate hikes in the US to tame inflation are rippling through the global economy, stoking recession fears. Deteriorating relations between China and the West are threatening to destroy decades of supply chain integration. And Beijing’s hardline zero-Covid strategy is constraining China’s economy and undermining its reputation for predictability and efficiency.