China's foreign business partners are now pulling out their funds from the Asian country. Experts said that billions of dollars in profit are being re-collected by foreign businesses out of China at an alarming rate.
This shows that although US President Joe Biden's meeting with Chinese President Xi Jinping is expected to boost the relationship between the two nations, non-Chinese companies are still becoming more cautious. Here's what business experts revealed regarding the fund pull-out trend of foreign companies in China.
China's Foreign Business Partners Pull Out Money at Alarming Rate
Chinese President Xi Jinping looks on during a ceremony to mark China's tenth Martyrs' Day, a day ahead of the country's National Day, at Tiananmen Square on September 30, 2023 in Beijing, China.
Nick Marro, a global trade lead analyst at the Economist Intelligence Unit (EIU) explained why American and other non-Chinese businesses in China are pulling out their funds.
Via BBC News, Marro said that domestic policy uncertainty, slower growth, and anxieties around geopolitical risk are among the main concerns of these foreign businesses.
Because of this, many of them are now thinking about alternative markets. Recently, some studies revealed that foreign investments in China declined by over $11 billion.
This happened in the three months to the end of September 2023. Market analysts said that the drastic foreign investment decline is the first decrease since records began in 1998.
They concluded that the massive investment decrease is proof that foreign companies are no longer interested in re-investing their profits in China. Instead, most of them now want to move out of the Asian market.
"China is currently facing slower growth and needs to make some corrections," explained Swiss industrial machinery manufacturer Oerlikon's spokesperson.
"In 2022, we were one of the first companies to transparently communicate that we expect the economic slowdown in China to impact our business," he added.
Read Also: Billionaires Launch Media Campaign to Promote Israel Amid Pro-Palestinian Protests
Will Biden-Xi Meeting Ease Foreign Business' Fears?
Chinese President Xi Jinping (R) shake hands with U.S Vice President Joe Biden (L) inside the Great Hall of the People on December 4, 2013 in Beijing, China. U.S Vice President Joe Biden will pay an official visit to China from December 4 to 5.
As of writing, it is hard to conclude if the meeting between Joe Biden and Xi Jinping-which is scheduled on Wednesday, Nov. 15-will help ease the fears of foreign investors in China.
The Guardian reported that the upcoming conference between the two supernation leaders is also overshadowed by the wars happening in Ukraine and Israel.
Although this is the case, many people believe that Xi Jinping's visit to the U.S. could greatly benefit China, such as attracting more foreign investors and retaining companies already in China.
Aside from the U.S.-China business relationship, Biden and Xi Jinping will also discuss other serious topics, such as Taiwan, the Israel-Hamas war, the upcoming U.S. election, and the Russia-Ukraine conflict.
Related Article: Joe Biden Considers Bolstering Military Ties With China, National Security Advisor Says
