Beijing needs to provide greater regulatory certainty on data security and other issues to help restore foreign investor confidence, the British Chamber of Commerce in China has warned.
A survey last month found sentiment among the chamber’s members had recovered from the depths of last December, with 8 per cent describing themselves as “pessimistic”, down from a record 42 per cent.
But six months after China abandoned draconian Covid-19 restrictions, 70 per cent of the chamber’s members were still adopting a wait-and-see attitude on new investments while they sought regulatory clarity, the business group said.
“There is some nervousness; it’s not just in individual sectors but across the board,” said Julian MacCormac, chair of the chamber, which on Tuesday released its 2023 position paper on British business in China.
The outgoing president of the EU Chamber of Commerce in China, Jörg Wuttke, warned that foreign investors were cautious and uncertainty over data security and changes to espionage laws were dogging businesses.
China is seeking to encourage private businesses to begin investing again to stoke a recovery in the world’s second-largest economy, which grew at its slowest pace in decades last year because of rigid Covid controls.
But foreign businesses have complained of mixed signals from Beijing, which has cracked down on consultancies in recent weeks over allegations some of their work touched on issues of national security.
Geopolitical and trade tensions between the US and its allies and China have worsened the outlook. China this week announced it was blocking chips made by US company Micron from use in important information technology networks.
In its position paper, the British chamber provided a range of recommendations for improving the business environment, saying navigating data security and IT regulations in China ranked among the top challenges facing UK companies in the country.