From Apple to Starbucks, Western firms’ China dreams are dying

Things have never looked rosier for foreign firms in China – at least according to the country’s Council for the Promotion of International Trade. The body, which is controlled by the Commerce Ministry, claims that 90 per cent of foreign companies rate their experience in China as satisfactory or better. According to a recent survey by the council, foreign firms say the economy is strong, local markets are attractive, and their outlook is bright. Following years of isolation during the Covid-19 pandemic, China’s government insists that the country is open again for business, and that reforms have made life easier for foreign companies.

Executives of those companies scoff at all this. Many say they now struggle to justify investing in the country and talk instead of cutting staff. In a recent survey by the American Chamber of Commerce in Shanghai, less than half of respondents said they were optimistic about the prospects for their business in China over the next five years – a record low. On Dec 4, Ms Mary Barra, the boss of General Motors (GM), said the American carmaker would write down the value of its joint ventures in the country by more than US$5 billion (S$6.7 billion) and close factories there. Many American and European companies with once-thriving businesses in China are watching these unravel.