China is losing its luster as a top country to invest in as companies seek to avoid geopolitical risks and turn to Southeast Asia and Europe, according to a survey by the European Union Chamber of Commerce in China.
Only 13% of companies surveyed earlier this year saw the country as a top destination for investment, the lowest level since the record began in 2010 and down from 27% in 2021. Companies were more optimistic about growth in China then, but now they are shifting. According to the research published on Friday, investments are increasing to soften the impact of the ‘decoupling’ between China and other countries and to find opportunities elsewhere.
The downbeat response underlines China’s declining appeal to foreign companies, despite Chinese President Xi Jinping’s November pledge to take more “heartwarming” measures to ease entry into the world’s second-largest economy. The deteriorating sentiment is especially alarming because it reflects a view of the country with the pandemic largely out of the picture, suggesting that the problems are long-term.
