China is losing its luster as a top country to invest in as firms seek to avoid geopolitical risks and turn to Southeast Asia and Europe, according to a survey by the European Union Chamber of Commerce in China.
Only 13% of firms surveyed earlier this year saw the country as a top destination for investments, the lowest level since record began in 2010 and down from 27% in 2021. Companies were more optimistic about growth in China then, but now they were shifting investments increasingly to mitigate the impact of "decoupling” between China and other countries as well as to find opportunities elsewhere, according to the survey released Friday.
The gloomy responses highlight China’s fading appeal to foreign firms despite Chinese President Xi Jinping’s pledge in November to take more "heart-warming” measures to ease access to the world’s second-largest economy. The worsening sentiment is especially alarming as it reflects a view on the country with the pandemic largely out of the picture, suggesting the challenges are long-term.