Foreign firms in China see ties fray with overseas HQs as information gap and communication chasm quell trust
- More multinationals undergoing a ‘decoupling’ with their China-based operations, hindering investment plans, new EU Chamber of Commerce survey finds
- Business analysts break down why a dearth of expatriates could be underscoring a recent plunge in foreign direct investment in China
In the 16 months since Beijing swung its doors back open and started rolling out the red carpet for global business leaders to perform on-the-ground assessments after three years of stringent coronavirus lockdowns, some lingering scars have failed to fade while fresh cuts have further blemished China’s attractiveness among multinationals.
A widening information gulf and more aggressive de-risking manoeuvres with historically strong trade partners have compounded a worrisome sense of hesitation among foreign firms and businesspeople to invest more on Chinese soil.
And now executives with foreign firms’ China operations say it has become increasingly difficult to influence operational and investment decisions made by overseas management, as global supply-chain shifts and non-business factors such as national security concerns are having an outsized influence on such decisions.
“This is especially the case as, while European companies’ China operations might still see opportunities to expand their presence in China, they find it increasingly difficult to convince their headquarters,” said the report, which was released on Friday and cited responses from 529 members companies in January and February.
We’re getting fewer stories out of China … The restrictions on economic data haven’t helped, either