EU Companies Struggle with Siloing Operations in China Amid Regulatory Pressures

Economy

1 year ago

News sources:

Credited from: SCMP

Regulatory Pressures: European companies in China are forced to silo their operations due to tightening national security and restrictive regulations.
Strategic Response: Siloing is seen as a necessary measure to mitigate risks and comply with local laws, affecting functions such as R&D, data, and IT systems.
Increased Costs: This operational shift increases expenses and hampers the ability to utilize economies of scale, impacting global competitiveness.
Investment Trends: Despite challenges, EU foreign direct investment in China has surged to €3.8 billion, indicating sustained interest.
Recommendations: The report urges China to allow more freedom for foreign companies to localise based on market needs without regulatory constraints.