Commentary: China is looking less attractive to foreign investment

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Political and regulatory issues in China have been exacerbated by zero-COVID and Russia’s war. The unpredictable outlook for many multinationals may herald a shift in how the global economy works, says the Financial Times’ James Kynge.

HONG KONG: “No matter what you may be selling, your business in China should be enormous, if the Chinese who should buy your goods would only do so.” Never did an “if only” clause carry more weight.

and his stance over Russia’s war in Ukraine — are conspiring to eviscerate the dreams of many multinationals.The result is that direct investment into China by foreign companies is falling off a cliff. Joerg Wuttke, president of the European Union Chamber of Commerce in Beijing, says the unpredictability is prompting the European business community to put investments into China “on hold”.

“Did you see the video of the guy in Shanghai shouting ‘I want to die’?” asked one British teacher based in the city, who declined to be further identified. “Well, that has done the rounds here as well. A lot of people are suffering from mental health issues. It is really hard to be cooped up at home for weeks, especially with young children.”All of this may portend a fundamental shift in how the global economy works.

“The bloom is coming off the rose,” said Mark Witzke, an analyst at Rhodium, who notes that China’s official FDI figures are inflated by factors such as counting multinationals’ earnings in China as investments.CHANGING BUSINESS OPERATING ENVIRONMENT

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