Doing Business In China Gets Harder, Becomes Less Attractive For Foreign Companies

Foreign companies are finding it harder and less attractive to do business in China as economic growth slows down and costs rise. China’s government is expanding its restrictive economic policies to include more industries in addition to banking, brokerage, and Internet. As competition heats up further, with local brands developing high-quality and innovative products, some foreign companies, such as Revlon, Best Buy, and Media Markt, have left the country. Others reduced their exposure and operations, such as L’Oreal’s decision to stop selling its Garnier brand of cosmetics and retailer Tesco’s joint venture with a state-owned enterprise. Some companies that chose to stay are facing difficulties, such as IBM, which reported a 23 percent drop in China revenue in the last quarter of 2013; and French drinks company Remy Cointreau, which said sales of its Remy Martin cognac dropped by 30 percent in the first three quarters of 2013.