Foreign Companies Exiting China as Market Conditions Deteriorate

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Foreign Companies,China,Market Conditions

Over the past year, several foreign companies, including law firms and investment banks, have closed their offices in China due to the challenging market conditions. The Chinese market has seen a decline in revenues for many multinational companies, leading to a change of heart for foreign businesses.

Foreign companies were desperate to get into China, and faced formidable bureaucratic obstacles in their way. Now many are getting out. Over the past 12 months several foreign law firms have closed some or all of their Chinese offices. Orrick, Herrington & Sutcliffe, an American one, said on March 22nd it would shut the Shanghai office it opened 20 years ago. Another, Akin Gump Strauss Hauer & Feld, plans to exit China altogether this year.

Some global investment banks are pruning their Chinese staff. So are a few large accountancies and due-diligence groups. One reason for foreigners’ change of heart is the sorry state of the Chinese market. Of the 18 largest multinational companies that report their earnings from China, 13 saw annual revenues there fall in 2023. Qualcomm and Samsung, two technology giants, recorded sales drops of more than 20%. Apple sold nearly a quarter fewer iPhones in the first six weeks of 2024 than it did in the same period the year before

 

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