Shanghai [China], May 20 (ANI): Despite the global community making efforts to corner China over COVID-19 pandemic, it still remains a hot destination for US companies, notwithstanding the worsening relations between the two countries.
According to a report in The Wall Street Journal, Popeyes, on Friday opened the first of 1,500 planned locations in China.
From Popeyes to Walmart Inc., Tesla Inc. to Exxon Mobil Corp., companies are betting that the country's long-term growth potential still outweighs the mounting case against further expansion, including geopolitical tensions and slowing growth, WSJ said in its report.
While the pandemic has spurred businesses to rethink supply chains to reduce dependency on China, companies that are producing in China for Chinese customers are bulking up their local presence, it added.
This despite China's economy contracted 6.8 per cent in the first quarter of 2020 compared to a year earlier.
The political risks of operating in China led by Xi Jinping have been rising as he asserts the state's grip on society. This has further increased due to the trade war between the US and China.
Even as the officials of two countries engaged in verbal-duel, China continued courting US companies during the pandemic. Early this year, China introduced a foreign-investment law setting out protections for brands and intellectual property, and promising greater regulatory transparency, reported WSJ.
On Monday, Zhong Shan, China's commerce minister, told reporters he wasn't worried about foreign companies leaving and said that "smart companies won't give up the huge China market."
However, WSJ citing an April survey of U.S. companies by the American Chamber of Commerce in China reported that 40 per cent said the uncertainty resulting from the Covid-19 pandemic would decrease their planned investments here. Yet, China and its huge consumer base are undimmed for some.
Tim Hortons said last Tuesday it would open 1,500 coffee shops in China, up from just a few dozen today.
Walmart said last month that its plans to more than double its footprint in China, by opening around 500 new stores over the next five to seven years, remain unchanged.
Similarly, Costco Wholesale Corp. is preparing to open at least two new China stores, having opened its first in Shanghai last year, according to the report.
Even as the COVID-19 pandemic has hit the demand for leisure and travel, spokesperson for Universal Parks & Resorts said the company is sticking with plans to open a Dollar 6.5 billion theme park in Beijing next year. (ANI)