A slowdown in China is forcing multinational companies to treat the world’s second-biggest economy more like a developed market, turning away from a headlong dash for growth to focus on premium businesses, or improving productivity by purchasing staff.
As the main driver of global growth for much of the previous decade, China is a godsend to big international companies looking to improve gains as markets elsewhere fought.
Now, though, Beijing is attempting to rebalance its economy into a more sustainable speed of expansion dubbed the “new normal” by President Xi Jinping, and with growth at its slowest in a generation, the present quarter has found a slew of firms citing China as a basis for underwhelming earnings.
“We’ve entered the brand new stage, a new normal with slower increase, which changes the company dynamic, also it changes the outlook,” said John Lawler, Ford (F.N) China CEO, at a recent conference for U.S. companies in Shanghai.
Economic data also demonstrated export growth slowing sharply in Japan, while South Korean exports fell – both blamed on the slowdown in their giant neighbor.
Companies in sectors like mining and building have felt the biggest pinch.