Companies from IBM to Starbucks are struggling with new obstacles in China as Communist Party officials tussle over the direction and depth of economic reforms.

China's state-controlled media last week accused Starbucks Corp. with charging too much for coffee and said Samsung Electronics Co.'s smartphones don't work properly. IBM's China revenue slipped 22 percent in the third quarter, contributing to the first-ever sales decline in the company's growth-markets division, as state-owned companies started delaying orders, including mainframes and servers.

"The operating environment for foreign firms has deteriorated in the last year in a serious way," said Shaun Rein, managing director of China Market Research Group in Shanghai. "In my 16 years in China, it's some of the worst business sentiment among foreign executives. They don't feel as welcome as they used to."

Continue Reading for Free

Register and gain access to:

  • Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
  • Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.