American Entrepreneurs Who Flocked to China Are Heading Home, Disillusioned

The Wall Street Journal has a lengthy article about how it’s gotten much harder for expat entrepreneurs in China. Specifically, “soaring costs, creeping taxation, tightening political control and capricious regulation that makes it ever tougher to maneuver the market and fend off new domestic competitors” are all a “signal to expat business owners their best days were in the past.” Among the signs that expats and expat entrepreneurs are leaving China:

  • Relocations firm Santa Fe Group A/S said it moves more families out of China than into it these days.
  • Enrollment at Shanghai American School where annual tuition tops $30,000, is nearly 17% off its peak five years ago.
  • The American Chamber of Commerce in China said 75% of its members are feeling less welcome while its Shanghai chapter lost over 600 members in recent years.
  • An AmCham poll of U.S. businesses in manufacturing-heavy Guangdong found 70% may delay China investment or shift it overseas.

In addition, it was noted that:

  • Authorities have stepped up scrutiny of visas and actively enforced pollution controls.
  • A new social security law lifted local wages and made it tough to fire workers, so much that some employers called the policy a modern “iron rice bowl.”
  • China’s Great Firewall of internet controls was reinforced – allowing big domestic tech firms thrived while the laws excluded foreign rivals or pressured them to share technology.

The Wall Street Journal article goes on to profile several expat entrepreneurs who are leaving China – including Steve Mushero, the author of “Off-Shoring the Middle Class: Managing White-Collar Job Migration to Asia.” A Reddit discussion thread about the article is also a fascinating read.

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