Global Businesses “Decouple” In China to Manage Risk
August 24, 2023
Big Silicon Valley venture capital firm Sequoia has announced that it will separate into three entities that collectively will cover Europe and the United States; India and Southeast Asia; and China. Its China business will operate independently under the name Hongshan. The EU Chamber of Commerce in China says businesses are “decoupling” their European headquarters and China operations, “primarily to manage risk.” A record number of surveyed businesses, more than 60 percent, experienced difficulties doing business in China over the past year, according to the group. The world’s biggest law firm, Denton’s, notified clients in early August that its China unit would operate as a standalone legal entity. It said the restructuring was in response to “new mandates and requirements relating to data privacy, cybersecurity, capital control and governance,” after China widened an already sweeping counter-espionage law in April. The campaign has had a chilling effect on US businesses in China, according to the American Chamber of Commerce in China.
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