The worsening trade relationship between Beijing and London is becoming a point of worry for British companies in China. The geopolitics could be one big reason for the dropping percentage of companies wishing to invest in China.
According to St John Moore, Chairman, British Chamber of Commerce in China, existing companies are doubtful about their plans to expand business operations in China. Most planned to invest more in Shanghai, while half were looking to expand in Beijing. Only 13 per cent of the British companies wanted to invest more in Hong Kong.
Statistics were collated after interacting with more than 250 companies. Most of them hail from professional services, advanced manufacturing and transport, and education, and 60 per cent expected the state of bilateral relations to have a negative impact on their business prospects. Of those, 20 per cent saw deteriorating ties as having a strong negative impact.
There are other concerns like global economic uncertainty that has been exasperated due to the pandemic, rising protectionism and labour costs. Trade relations between the nations have been growing bad to worse as Britain retracted any trade over telecom equipment makers Huawei Technologies.
The two countries have also clashed in recent months over Beijing’s imposition of a sweeping national security law in Hong Kong. In retaliation it seems, Beijing isn’t doing too much to maintain a friendly relation with Britain either. For example, their new foreign investment law hasn’t improved the position of British companies in China.
Overall picture is grim for British companies who still prefer mainland china for their existing and future business expansion hopes.