China govt-instigated consumer boycotts making companies less willing to invest

PTIUpdated: Tuesday, May 11, 2021, 02:46 PM IST
article-image
China flag | File photo

An American business group warned Tuesday that government-instigated consumer boycotts of foreign shoe, clothing and other brands in China are making companies less willing to invest.

That is adding to anxiety over Beijing's plan for a list of “unreliable entities” that might be punished for actions deemed to run counter to Chinese interests, the American Chamber of Commerce in China said in an annual report on business conditions.

The report reflects growing unease among American and other foreign companies about the impact of economic and strategic tensions between Beijing and their home countries.

Brands including Swedish retailer H&M, Adidas and Nike have been targeted by demands online for consumer boycotts. That came after state media criticized them for expressing concern about reports of possible forced labour by ethnic minorities in the Xinjiang region of China's northwest.

The American Chamber said 78 percent of companies that responded to its survey cited "rising tensions” between Beijing and Washington as their top concern.

Beijing announced plans for its “unreliable entities” list in 2019 after then-President Donald Trump blocked access to US components and technology for Chinese tech giant Huawei Technologies Ltd. Officials have yet to say which companies might be on the list or disclose the criteria for being included.

Concern about the list is “aggravated by consumer boycotts instigated by official organizations and through Chinese media," the Chamber said. It said one in five companies expressed concern, while 7 percent said it was decreasing their willingness to invest.

Despite that, half the companies surveyed said China's investment environment is improving, while 38 percent said it stayed the same. The Chamber said only 12 percent reported conditions had deteriorated, the lowest level since 2015.

The Chamber noted that 27 percent of information and computer technology companies said investment conditions were deteriorating, the highest level of any industry. That finding comes at a time when the ruling Communist Party is using subsidies, market barriers and informal pressure on companies to try to develop its own high-tech industries.

(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

Layoffs spill over into fashion industry, H&M to fire 1500 workers for cutting costs amidst...

Layoffs spill over into fashion industry, H&M to fire 1500 workers for cutting costs amidst...

Investment opportunities in space cooling to be $1.5tn by 2040 in India: World Bank report

Investment opportunities in space cooling to be $1.5tn by 2040 in India: World Bank report

Rupee gains 34 paise to close at 81.38 against US dollar

Rupee gains 34 paise to close at 81.38 against US dollar

Financial cost of Vistara-Air India merger for Singapore Airlines minimal compared to its stake in...

Financial cost of Vistara-Air India merger for Singapore Airlines minimal compared to its stake in...

Festive season hiring this year grows by 73%: Report

Festive season hiring this year grows by 73%: Report