Overview

• Despite economic concerns and political tensions, American fast-food chains are expanding in China, with KFC opening its 10,000th restaurant, McDonald's planning to open 3,500 new stores in the next four years, and Starbucks investing $220 million in a manufacturing and distribution facility.
• This expansion contrasts with the actions of other major brands like Adidas, Apple, and Samsung, which are considering or taking action to shift manufacturing away from China due to concerns about security controls, protectionism, and unstable relations between Beijing and Washington.
• Overall foreign investment in China has been falling, with the July-September quarter seeing a net foreign direct investment deficit of $11.8 billion, the first quarterly deficit since Beijing began publishing the data in 1998.
• Many multinational companies are shifting investments to other places, such as Southeast Asia or India, or repatriating their earnings, which has affected China's economy, which is yet to fully recover from the disruptions of the pandemic and a property industry crisis.
• Despite the expansion of fast-food chains, U.S. businesses have reasons to be cautious about expanding in China, with the U.S. recommending Americans reconsider traveling to China due to arbitrary law enforcement and exit bans and the risk of wrongful detentions.