State of US Companies in China

State of US Companies in China

The economy of China has been one to look out for a lot of companies especially those who have a lot of money. When we take a lot of the different markets today such as technology, automobile, and even smartphones a lot of the brands that are popular are already from China. This shows a lot of development and potential that has been capitalized by the companies from China. A lot of these companies from China are able to compete even with well-known companies from different markets. The growth of the economy of China has also led to multinational companies from different countries to ride the wave of economic growth in hopes of earning a lot of money given the current state of the economy of China.

One of the countries which showed interest in China is the US. Despite differences and tensions between both countries when it comes to business it has been somehow set aside in order to earn a lot of money. Since the start of the growth of China’s economy, these US companies have paid attention and invested a lot of money in hopes of high returns when the time comes.

After all, when it comes to having a business and investing spending money at the right time and at the right things could either make it or break it which is what a lot of these companies have done. When you think of China you cannot help but consider just how big their economy is, the amount of people and the potential the country has. However, companies that chose to invest in China soon realized that they might have gotten themselves into something they cannot afford.

US companies who invested in China while the economy was growing are already starting to pull out. A lot of these companies are very established in the US such as McDonald’s and Coca Cola. The main problems these companies are having is that the cost of investing in China is simply too expensive. At first these companies might have thought that the expensive costs would be worth it because of the profit but as the years went by these companies have found it too much and decided to opt out of China aside from these issues with their business such as permits and other regulations have also started to become a problem which adds on top of the high cost of investing in China. A lot of these companies have also realized that the companies from China are able to compete with their products and the potential of the markets may not be as big as they seem.

The issues met by the companies from the US might be the same for other countries as well which is why they are deciding to sell and stop their investments in China. This could be a bad thing for China since a lot of money is also coming from these investors and if they are driven out or scared off by high costs of investment this could be the same for all. China has to improve its foreign policies and avoid issues such as Rape of Nanking if it wants to attract foreign investors. Despite all these issues the US continues to show interest in China and China has also expressed interest in the US.

The relations between the two could mean a lot of money for both sides. If only China is able to fix its problems with foreign investors these companies might reconsider getting back into China it really depends whether China wants to invite foreign investors and make the cost of investing in the country cheaper.

Categories: Business

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