Foreign firms in China express cautious optimism for 2023, but geopolitical risks, market barriers remain
- Foreign firms in China remain cautious about regulatory uncertainty, geopolitical tensions and unfair protectionism
- Analysts expect an economic rebound in the second quarter and an uptick in visits from foreign CEOs in coming months
Foreign companies are cautiously optimistic about business prospects in China, though rising geopolitical risks, opaque policies, market barriers and diversification trends are complicating the outlook.
“We expect foreign investment to rebound in 2023, given that the elimination of zero-Covid protocols has removed a huge impediment to routine business activities,” said Nick Marro, senior analyst with the Economist Intelligence Unit (EIU).
“A lot of established companies are still betting on the growth potential of the Chinese consumer, given the size of the middle class, as well as the opportunities in sectors like healthcare, finance services and clean technology.”
But most – if not all – companies will retain a cautious outlook on China, he added, owing to lingering concerns around policy opacity, regulatory uncertainty, and unfair protectionism.
These issues have long discouraged foreign firms from devoting more resources to the Chinese market, at least to the same degree as they did over the previous decade.