Continua il “disaccoppiamento” dalla Cina, aziende e capitali occidentali scappano dal regime cinese

Welcome to Crossroads. According to a recent analysis, companies in China are seeing their profits plummet to record lows. Last year, only 66% of US companies produced goods in China. And European companies are also witnessing a similar decline. And prospects are not better. And there is also an obvious chain reaction to investments. Not to mention the new policies of the regime that favor national companies, with their economy in free fall, with the real estate and banking crisis, and with a growing world trade war. All of this is coming together in one fell swoop in China. In these situations, often the vicious circle of companies and foreign capital in escape aggravates an already tetrad economic scenario in itself. And according to this new analysis of the US Chamber of Commerce in Shanghai on the Chinese economic climate, US companies in China are particularly affected. Factors such as growing geopolitical pressure and China's economic slowdown are contributing to less optimistic prospects for China. Let's see some exact numbers. Only 66% of US companies produced goods in 2023. This is a record low according to reports. 47% of interviewees are optimistic about the higher business outlook in China. 13% of interviewees refer to China as the main investment destination of their headquarters. Both values of this ratio are the lowest in history, ever. And it's another 2 thirds of companies are following a risk reduction strategy, with 36% investing in the resilience of the sector and 25% separating Chinese data and information from non-Chinese. What does that mean? It means that they're putting their backs to the insurance. If the Chinese economy crumbles, their business will not be destroyed. When they say risk reduction, it means eliminating the risk created by being too attached to the Chinese economy so that as things go further down, it will not do them any good. And when they talk about separating Chinese data from non-Chinese, it basically means that they're building two separate worlds, so to speak. And investing in the resilience of the sector means preying on yourself to avoid finding yourself without rare earth suppliers. If, for example, you're a high-tech company, if the PCC interrupts your supply, you have other places to go to buy the raw material. Translated, now they consider the Chinese Communist Party unstable. And it's a record high, 25% of investments cut in China. And only 20% is expected to do it this year. And that's the main reason why they're reducing investments, is concerns about slow growth in China. And this is also the reason why 40% of the members of the Chamber of Commerce are redistricting planned investments to Southeast Asia and the Indian subcontinent, making money back in the same economy and efficiency elsewhere. Why keep it in China? And only 22% of the interviewees express confidence in the Chinese government's commitment to further open up the industry in the near future. Because, aside from everything else, the CCP is on national production. They want Chinese companies, not American, not European. They want Chinese companies. And we were able to see some companies abandon China. Epoch Times says this. IBM has decided to follow the example of what has become a long list of American brands and close some of its activities in China. And although the leadership has maintained diplomatic tones, it is clear that, like other American companies, it has understood that the air is pulling now. If this is an inconvenience and a expense for companies that abandon agreements tenfold, it hardly makes China lose the experience and commercial capacity of these activities. And as I said, this is not just an American problem. The Chinese regime is not only dealing with American companies. It is a general trend, which we see also happening with European companies. There was a report from the Chamber of Commerce of the European Union in China with results very similar for European companies in China, whose main concern is the economic slowdown of China. However, there are several other factors that are impacting the confidence of the companies, including access to the market and regulatory barriers. This means that the PCC is in a way preventing them from accessing the markets and the Chinese regulations are making it difficult for them to do business. Again, the regime favors national companies and not foreign ones. In short, it is a highly politicized economy. And the party will be introducing greater control also on investments and the financial sector. Then there are always low consumption, excessive production capacity, ambiguous regulations and the regime's fixation on issues of national security and high self-sufficiency. They only want Chinese companies. And it also seems that the board of directors and shareholders are starting to think that the returns of investments in China are no longer measured to the risks. That is, it is no longer worth staying in China, because for about two-thirds of the members of the European Chamber of Commerce, the profit margins in China are equal or lower than the world average. And pessimism about future profitability is at its lowest high. In other words, the costs of being there are very high. And the benefits of being there are very low. So that's raising the question of why aren't they going there? Maybe because they now want to consider it as a market to market, a market in which to sell. But even if it were, what need is there to keep them there? Seats and subsidiaries? At this point, we have to say that we all knew that in China it would end up like this. When the Chinese Communist Party had to announce the solution to economic problems, we saw the crisis of the Chinese banks, the race to the gates and the police arresting the currentists. Then, of course, there was Evergrande and the various Chinese real estate giants that failed. And the party that did. In the Third Plenary Congress, that is, the Politburo meeting at the highest level, the Chinese Communist Party came out with outstanding statements and amazing forecasts about the inevitable fate of the world's leading power waiting for China, etc. In short, a lot of chit-chat, but no indication of how this should happen. Not even a single real proposal. And it wasn't even just the mainstream journalists. This is the essential thing, you know. Investors were clearly saying that the PCC was not giving any concrete solution. But even then, there was still someone who was insisting on having faith. And even investors that were saying, well, you know, they think they have a plan and if they do, you've got to tell them what it is. And in fact, now they've found out what it is, right? And they found out what it is, they want to throw everyone out of China, to focus on national production. They have a goal, state publicly, to replace even foreign technology on every single system. They don't want Windows, they don't want American operating systems, they don't want American software, they don't want anything important to be used in China that comes from abroad. And they're working on it to replace non-Chinese systems that are in use for now. And I'm looking at the pie chart. Now, the important thing with this is that China is declining. Now, here's more of this in the European Chamber of Commerce. They see the importance of this is that the foreign business community had waited for the third plenum of the Central Committee of the Chinese Communist Party for signals that at least some of these problems were addressed. And they say that this instead, the decision of the third plenum, the decision of the top level of the PCC, continues in the direction of investments in the production as the engine of Chinese economic development, behind the windshield of the so-called new productive forces of quality. This is the PCC's slogan. They say, i.e. the aim is to increase the productive capacity of goods and strategic technologies at the highest added value. The intention to develop the internal demand is clearly stated, but without saying anything concrete about how the consumption would be stimulated. How will they convince the Chinese to spend? We don't know. But with European companies in particular, the PCC is adopting more targeted measures. ABC News says, In August, China filed a complaint to the World Trade Organization for the taxes of the European Union on electric vehicles manufactured in China and also launched investigations on dumping and subsidies on European exports of dairy products, brands and pork. For many years, there has been a fear of a trade war. And it's many European companies' assessment that the return on investment in the second economy of the world is not worth the risk, between the slowdown and the politicization of the Chinese economy. Briefly on this. He imposed taxes on Chinese electric vehicles. Why? Because China, since it had produced too many and had to get rid of them, has unloaded them on foreign markets at significant price drops. But Chinese companies, many of which take money from the state, especially in the sectors of electric vehicles in which they want to compete in the future, sell at prices with which no one can compete, because other producers have to make profits, while Chinese manufacturers stand on their feet only thanks to the money they take from the Communist Party. In fact, they are the ones dumping. The Chinese regime puts its competitors out of play, makes them fail, and then has the monopoly of the entire sector. And if you're at that point, you can buy your competitors and get to the world monopoly of an entire sector. Now, Europe, the United States and many others don't want all this to happen. And they were opposed by saying, no, you can't sell systematically at a low price to make us fail. And they had won. So now the Chinese regime is furious and says, well, we're going to do the same thing with milk, pork, etc. Now, for him and his group, it's not a big problem. But for some member states, China is a big market. And so the CCP is bypassing it, going to the individual states to conclude trade agreements to manage these debts. But what matters here is the general signal which seems to be that the Chinese economy is not doing well and it's going to get worse. And so here it's not just a matter of normal trade wars. There are sanctions that are always increasing. Taxes everywhere. And then the growing role of the CCP in the conflicts of the entire planet, Russia, Ukraine, Israel, the South China Sea, Taiwan is at risk. And now there's the Arctic. And so the general trend is clear. Now, back to the position taken by the Chamber of Commerce of the European Union, let's see how the European companies are reacting. And the recommendations that they're giving to China are coming almost well. Let's read. Asking the CCP to enact legislation that establishes equal rules between foreign and Chinese enterprises. Improving the predictability and reliability of the Chinese regulatory environment by enforcing specific and clearly defined and drafted legislation in concert with the industry. Preventing irregular regulatory changes and allowing reasonable transition times before implementing new policies or norms or changing existing ones. Permit access to legitimate data and business intelligence that companies need to make conscious investment decisions. Preventing companies from punishing for the actions of their national governments to not be the CCP. Basically speaking, the Chinese Communist Party is not going to back off in favor of national production. Because the CCP is not going to adopt clear laws as a way to hold foreign companies under control. And it's not going to back off in commercial wars and escalation conflicts just because some companies that at the moment don't even seem to care are complaining about it. Now let's see, the CCP is right in the right direction in the opposite direction. The Chinese Communist Party is becoming more aggressive. Not only that, the CCP's priority is not at all these European businesses. The priority of the CCP is national production, total independence from the outside world. And these various trends that we're seeing very likely to have a combined effect. The important factor here is the capital. If businesses leave China because business is bad, what message does it send to investors? Investors will say, well, these, the businesses we're investing in are leaving China. And it's probably going to be a bad blow because they're losing a market and this disincentives them to invest in them. The domestic policies that go along with it have become unfavorable. Now if China loses investors, also it's going to make less money in the economy. And the problem here, along with everything else, is lack of consumption. The Chinese are not buying products like they used to. And it's business, but also people have to buy. Because again, you know, we're putting the money to profit. Nobody makes profit, You go to a restaurant, you go online, you stop and buy things, and then you bring the money to other businesses that in turn pay their employees. That's how a normal, healthy economy works. But when people stop spending, what happens? Money doesn't go, obviously. Now, investments can help get out of the vicious circle of recession, but it's always necessary for people to spend. And this is why there's some hope in the future of the economy, some positive expectations. All of that when a lot of people not getting money is going to end up happening now. People don't need to sit around that it might not be as good as it was. Well, all of this happens because people worry about tomorrow and the economy is going to stop. Now, CNBC says that according to the business in China, the European companies in China are so scurred that Beijing, the regime, must act if it wants companies to invest further. We believe actually that we are in sort of a tipping point situation if you want to do something and the time is now. That's what I said to Jan Seskelund, president of the Chamber of Commerce. Now, according to the Chinese Ministry of Commerce, foreign investment in China has reduced by 29.6% in January and July compared to a year ago. And this is one of the main reasons why we are in a tipping point situation if you want to do something and the time is now. Ministry of Commerce, foreign investment in China has reduced by 29.6% compared to a year ago. Ministry of Commerce, foreign investment has reduced by 29.6% in January compared to a year ago. In the United States, the policies against the Chinese regime are becoming bipartisan. Normally, the countries that deal with the United States know that every two years, with midterm and every four years with presidential elections, there's a possibility that American policy will change because we tend to alternate between Republican and Democratic but when you have Republican and Democratic aligned on a certain problem, the music changes and on China, Republican and Democratic are relatively aligned. Now, Atlantic, for example, says that one of the few things that the Trump that Republicans and Democrats seem to agree on is the trade war with China, the tariffs and the sanctions that are still in force and probably will remain in future administrations. It's unlikely that this U.S. stance on China changes regardless of who will be elected and everyone is noticing it. And the EU has just taken a stand on business with China talking about reducing the risk this is from the official website of the European This represents a 14% compared to 2022, which was even a difficult because of the lockdown. At the European Council in June 2023, the EU member states reaffirmed the political policy approach of the EU towards China outlined in its 2019 That is, China is at the same time a partner, a competitor and a systemic rival. However, the balance between challenges and opportunities presented by China has changed over time. They say our economic relationship is critically unbalanced both in terms of trade flows and investments due to a significant asymmetry in our respective market openings. Translated, they lose money doing business with China while China earns. Businesses are more profitable for the Chinese regime than for him. There is an imbalance and it is the same as in America, the trade imbalance with China. In addition, China's economic model has led to systemic distortions with negative on trade partners. According to the FMI, China's use of certain industrial policies, in particular its support for sectors, has repercussions on trade partners. The regime's in other words, are damaging international markets. And with the opening to China when they were talking about reform and opening and they led it into the World Trade Organization, the hope was that this would become less communist. What happened? The CCC made the free market more communist. In other words, another area of concern is China's drive for import substitution and self sufficiency and they don't want anybody else. They don't want foreign companies in the market. And while the U.N. welcomes the efforts of the Chinese authorities to attract foreign investments, the U.N. continue to suffer discrimination in the Chinese And they say it remains difficult for European companies to compete with because of the lack of equality of conditions. Moreover, despite the Chinese government's desire to pursue a broad opening of its market and build mutually advantageous China remains still closed to the U.N. say the U.N. committed to reducing the risks and not separating from China They say this entails reducing the risks of China because the Chinese could collapse or could expel all foreign companies They want to be sure not to depend on PCC which from today to tomorrow could ban trade in the U.N. They want to be sure not to depend on PCC U.N. They want to be sure depend on today to tomorrow could ban trade They trade ban