The British Chamber of Commerce in China recently published its latest sentiment survey of British businesses in China. Just under half of the companies feel optimistic over 2024, in what the report describes as a “slow return” to positivity, as reported by the South China Morning Post.
With 301 respondents, the survey shows that the “peak negativity” over the pandemic and lockdowns has passed, but most businesses are still adopting a “wait-and-see” approach to investing next year. 42% of responding companies say there will be “no change” in their investment in China, while 35% will increase and 13% will decrease.
Issues behind the sentiment include the slowdown of China’s economy even after its reopening in 2023. Despite the post-pandemic recovery, 60% of respondents felt that it has been hard to do business in Mainland China this year compared to the year before. Among them, 78% cite economic factors as a reason that it has been challenging. Indeed, 72% of the companies decreasing their investment, state that the reason is due to “economic uncertainty in China”.
Meanwhile, among those sharing the view that 2023 has been difficult, 53% cited geopolitical factors as their reason. Geopolitical concerns and the uncertainty the issues cause over trade policy have had a negative effect on 42% of the participants. Other concerns include regulatory factors such as difficulty in acquiring licences. As a result of these concerns, 45% of respondents rank China as medium or low priority in their global plans, compared to 40% who ranked the second largest economy as a high priority.
On a more positive note, the government has published its “24 Point Guidelines for Attracting Foreign Investment”, which addresses many of the regulatory concerns. Other findings from the survey include the fact that British businesses in China are gravitating towards R&D areas like “sustainability, AI and technological advancement”. British businesses are encouraged by the growth in these sectors in China and are also trying to leverage that.