Western companies cut investment in China amid economic slowdown and geopolitical tensions
Western companies have begun to put China on the back burner in their investment strategies, cutting back on business activity due to the economic downturn, increased competition and geopolitical tensions, the WSJ reports. About 20% of companies plan to reduce investment in 2024.
International companies that have invested in China for decades because of its cheap labor and huge market of 1.4 billion people have begun to change their investment strategies. According to The Wall Street Journal (WSJ), they are cutting back on business activity in China due to a protracted economic downturn, increasing local competition, and geopolitical tensions.
According to AmCham Shanghai surveys, about 20% of international companies plan to cut back on investment in China in 2024. The share of companies viewing China as their top investment target has fallen to its lowest level in 25 years. Among those that have already cut back on business in China are giants such as Apple, Walmart, IBM, and Honda Motor.
The rise of alternative manufacturing destinations in other Asian countries, such as Vietnam and Indonesia, is also helping to change priorities for many international companies looking for new markets and more stable conditions for development.
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