- According to Commerce Secretary Gina Raimondo, American companies are increasingly finding China “disinvesting.”
- They face new anti-espionage laws and more competition from subsidized Chinese companies.
- Deflation, rising youth unemployment and an asset crisis have also spooked global investors and businesses alike.
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Commerce Secretary Gina Raimondo said Monday that US companies are increasingly viewing China as a difficult place to do business as the Asian country struggles to deal with a number of economic barriers.
Speaking to reporters on a bullet train between Beijing and Shanghai, Raimondo highlighted the difficulties facing companies in the world’s second-largest economy.
“I’m constantly hearing from businesses that China isn’t worth investing in because it’s become too risky,” she said, according to Bloomberg.
Raimondo said, “There are some traditional concerns that they’ve become accustomed to dealing with. And then there’s a whole new set of concerns, the sum total of which is making China feel too risky for them to invest in.”
American companies are facing new anti-espionage laws introduced by Xi Jinping’s Politburo, as well as more competition from state-funded Chinese firms.
China is also struggling to restart its economy after three years of a harsh zero-Covid lockdown and has failed to prop up its troubled property sector.
Stocks are battling the longest-running bout of capital outflows on record — and investors pulled out a whopping $11 billion over an 11-day period earlier this month.
Government officials said over the weekend they would cut stamp duty taxes and lift some restrictions on share sales to revive the country’s faltering market, providing a short-term boost to the benchmark CSI 300 index.
Raimondo has been tasked with improving trade relations between the US and China.
Secretary of State Anthony Blinken, Treasury Secretary Janet Yellen and Joe Biden’s climate envoy John Kerry have made high-profile visits to Beijing in recent months – but Raimondo himself has placed a number of Chinese companies on export controls, which the US has Strictly. Access to its rival’s flagship semiconductor chips.
“The fact that we can now have informal communication, be able to pick up the phone and talk, is a step forward,” he said on Tuesday.
Raimondo said, “It doesn’t mean that I will compromise or agree when we talk.” “It means we have a chance to reduce misreporting and share information.”