“The rivalry between China and the United States is such that economic decoupling will increase”

Lhe leaders of Western companies established in China will, from October 16 and for a few days, have their eyes turned towards the Palace of the People, in Beijing, where the 20e Chinese Communist Party (CCP) Congress. With this worrying question in mind: will the strategic orientations set at this five-year summit amplify the difficulties accumulated since the hardening that followed the 2017 congress, then the zero Covid strategy imposed without weakening since 2020? Against the backdrop of the Taiwan mortgage.

President Xi Jinping’s second term marked the end of the golden age of foreign investment, which began with the opening of Deng Xiaoping. Strict containment from the first cases of Covid-19, administrative and regulatory brakes, product boycott campaigns, forced technology transfers, diplomatic-military tensions in the South China Sea: everything encourages caution from companies that do not want to leave. the middle Empire. Only companies that can help Beijing catch up with its technological lags seem to be treated better.

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The times are for national preference more than for the opening of the market, for politics more than for the economy. This unanimous observation, the bosses draw it up in private so as not to offend the extreme susceptibility of Chinese leaders and harm their business. The general manager of Stellantis (PSA, Fiat-Chrysler) broke a form of omerta, probably because he is less exposed after the failure of the Chinese adventure of Peugeot-Citroën. Carlos Tavares did not hesitate to denounce, at the end of July, “a clear politicization of the business climate for four or five years”.

And what threats on the horizon! There will be, he assures, “growing tensions between the Western world and China” and “crossed sanctions that will put companies in very difficult situations”. The decline in sales of German, American and Japanese automobiles in favor of Chinese cars reflects, according to Mr. Tavares, “the priority given to national manufacturers by Beijing”. Foreign groups with major production sites in China “will suffer”he says, before concluding: “I wouldn’t like to be in the shoes of Volkswagen or General Motors! »

The end of the Chinese Eldorado

The threat goes beyond the automotive sector. Never have so many investments in safer countries for business been considered or made, such as those of the American Apple in Vietnam or the Taiwanese giant of electronic chips TSMC in Japan. Reports rain down and all say the same thing. The US Business Council, which brings together 270 major American companies, announces a drop in investment in 2023. The European Union Chamber of Commerce has just confirmed that China’s attractiveness is eroding. Its president, Jörg Wuttke, regrets that“She continues to withdraw into herself” when other countries remain committed to globalization.

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