The escalation of US-China trade war has prompted many businesses to relocate their business from China. According to the expert China business lawyers, the fear of Chinese authorities crack down on the foreign businesses is quite obvious. But the on ground reality is, foreign businesses don’t need to press the panic button immediately. Here we are explaining the reasons why overseas companies can continue their business operations in China without any hesitation:
Chinese Government will not Shut Down Foreign Firms-
In spite of the Huawei incident, it is quite unlikely that China will go after every foreign firm. There is no incident reported that suggest even a single US or European company has been told to close down their operations from China. US President Donald Trump wants to lower the trade deficit by imposing tariffs, making Chinese imports expensive. This, he hopes, will prompt US citizens to buy products that are made in their country. However, no one is forcing US companies to manufacture goods in China. At the same time, no one is forcing Americans to buy goods made in China. They do so because they see value for money in it.
Chinese Government will not Disrupt Supply Chain-
Given the economic situation of the country, the Communist government of China will hardly disrupt the supply chain. Marriott, Delta Air Lines, Zara and all the other big brands are rapidly expanding their business in the mainland China and signing new deals. The good thing is, Chinese government is fully supporting their new ventures and taken credible actions to reduce the red tape that may disrupt any sort of foreign investment.
China Welcoming Foreign Investment-
Chinese president Xi Jinping at the World Economic Forum in Davos this year, promised improved market access for foreign companies. China is becoming increasingly friendly towards foreign firms operating in the country. A greater number of investor-friendly policies are on the cards to smoothen the overseas investment. However, you need to make sure your China WFOE actually exists and is licensed to do what it is actually doing.
Chinese government is attaching equal importance to the foreign companies as well as the state-owned enterprises in providing a safe business environment. The structural reforms initiated by the Chinese government is a strong signal that this country is still the best place for doing business.