Foreign companies operating in China are doing more to distance themselves from the country.
In the past, such companies often reinvested China’s profits in the local market, but many have halted the practice. Instead choosing to move the money elsewhere.
The trend is showing up in China’s official data. In the third quarter of this year, China saw a deficit of $11.8 billion in foreign investment. It’s the first deficit since records began.
Concerns driving business away include China’s slowing economy and geopolitical tensions between China and other nations.
US Company Sells Off $1.8 Billion in China Stakes
One American company is cashing in a 1.8 billion dollar investment by selling off stakes in China.
Investment firm Carlyle has reduced its China business before in recent years.
Among Carlyle’s global business, about 5 percent targeted Chinese companies this year. Just half of its China investment in 2021.
McDonald’s Boosts Stake in Chinese Business
This time, Carlyle sold those stakes to another American company: McDonald’s.
The fast food chain is instead going against the trend of reducing China ties.
Less Japanese Firms Plan China Expansion: Survey
The trend has also reached one of China’s neighbors: Japan. China is Japan’s biggest trading partner. But Japanese firms are losing confidence in Beijing — with sentiment falling to a historic low.
A new survey shows less than 30-percent of them are planning to expand in the Chinese market. Falling from 40-percent two years ago.
Last month, China arrested a Japanese executive an employee of Japanese drugmaker Astellas Pharma, on suspicion of espionage. The arrest has had a chilling effect on other Japanese businesses.
UK Company Raises $29 Million Reducing China Dependence
American and European countries are trying to explore new technology to reduce dependence on China’s rare earth manufacturing. Rare earth minerals are key to making the engines of electric cars. But with help from a new technology, soon engines might no longer need the materials.
A British company called “Advanced Electric Machines” announced that it raised about $29 million for developing and producing the new engines.