BEIJING, Sept 13 (Reuters) - U.S. and European firms are shifting investment away from China to other developing markets, a report from Rhodium Group showed, with India receiving the vast majority of this redirected foreign capital, followed by Mexico, Vietnam and Malaysia.
"Diversification is well underway," the research organisation said, but acknowledging: "it will take years for advanced economies to achieve the objectives behind their 'de-risking' policies," as China is so central to global supply chains.
Low production costs and the prospect of a massive middle class drew the first foreign firms to China in the late 1980s, as the country abandoned its Maoist economic model.
The shift comes as Chinese local authorities struggle to revive foreign investment after an economically bruising pandemic and property crisis depleted their coffers.
But the authors cautioned that diversification is unlikely to result in a rapid decline in exposure to China because the markets foreign firms are investing in are heavily reliant on trade and investment with the Asian giant themselves.
Persons:
Wednesday's, Joe Cash
Organizations:
Thomson
Locations:
BEIJING, China, India, Mexico, Vietnam, Malaysia