While some reports indicate that FDI investment in China is waning due to increased concerns about insufficient transparency, weak rule of law, China’s implementation of its anti-monopoly law, and market access, officials with the American Chamber of Commerce in Shanghai (AmCham Shanghai) indicated otherwise during a press roundtable held in mid-September in Washington, DC.
AmCham Shanghai representatives were in Washington as part of their annual visit to US government officials.
At the press event, AmCham Shanghai chair Robert Theleen noted that China's anti-monopoly law has injected new levels of uncertainty in the business community. Mr Theleen, who is also the chairman and CEO of investment advisory firm ChinaVest, added, however, that infrastructure building, urbanisation and the rise of China’s middle class means “that China provides a platform for American industry never seen before in Asia".
These factors, said Mr Theleen, have shifted the view of China as a country focused on manufacturing to one of services. As a result, he noted that while the Chinese government continues to benefit from state-owned enterprises, larger companies are moving away from organic growth to growth by acquisition.
When asked about China's apparent ongoing reduction in investment, Theleen replied: “We don’t see that. There is enough evidence that sophisticated companies are looking to buy three things: geographical markets, distribution supply chain management and logistics, and Chinese branding. Chinese brands are now targets for US multinationals.”
This is reportedly creating consternation with Chinese officials in Beijing, who question why foreign companies operating in China want to buy emerging brands and take them off the market. “This is a clash point that has propagated awkward movements in China toward foreign companies, and has caused concern among agencies in Washington,” said Mr Theleen.
Yet he admits that AmCham Shanghai cannot find tangible examples of where US companies have been damaged by Chinese government action. “The Chinese will tell you that there are more Chinese companies under investigation than foreign companies,” said Mr Theleen. “But who knows what the levels of investigation and penalties are. This is of deep concern to everyone.”