BEIJING: The slowdown in the Chinese and global economies is the biggest issue affecting British companies in the world’s second-largest economy, beating geopolitical concerns and market access barriers, according to the British Chamber of Commerce in China.
Despite the easing of „peak pessimism” recorded during the pandemic, British businesses are delaying new investment in China amid a faltering economic recovery and downplaying the country’s importance to their global operations, the chamber’s annual sentiment survey released on Tuesday showed.
Foreign investors have been bearish on China for much of this year due to a weaker-than-expected Covid recovery, a series of office cuts by Chinese officials, cash-strapped local governments offering fewer investment incentives and higher investment yields in the United States. In the states.
„As China reopens after three years of significant pandemic-related disruption, external factors are still making British businesses reluctant to enter the market,” the chamber said.
„(British) companies in China are effectively treading water as they delay key decisions on investment and market entry.”
Some of the Chamber members include AstraZeneca, BP, Jaguar Land Rover and Shell.
Chamber findings based on member feedback in October and November found that 60 percent of companies believe doing business in China has become more difficult in the past year, with 78 percent blaming economic factors.
More than half of the companies surveyed say geopolitics makes it difficult to operate in China, while 43 percent struggle with regulatory issues such as licensing.
FDI to China has fallen significantly since it abandoned its strict Covid-19 restrictions late last year, leading it to record its first quarterly deficit in FDI in July-September, indicating capital outflow pressure.
„British businesses are experiencing a slow return in confidence,” the chamber said.
Less than half of the companies surveyed listed China as a „medium priority” or „low priority,” with only 40 percent registering it as a „high priority.” In comparison, fifty-nine percent of companies saw China as a „high priority” beyond 2021-2022.
Trade between Britain and China was worth 111 billion pounds ($140 billion) last year, according to the British Office for National Statistics, making China the UK’s fourth largest trading partner.