Steadying the Ship and Navigating Uncertainties
China’s annual “Two Sessions” legislative meetings outlined cautious policies focused on continuity and stability for 2022 as Communist Party leaders seek a smooth path toward the 20th Party Congress this fall.
The plan is for a 2022 growth target of 5.5% to be fueled by tax cuts, improved access to financing for small and medium enterprises and attracting more foreign direct investment. The planners did acknowledge that the economy faces the “triple pressures” of shrinking demand, disrupted supply chains and weakening expectations.
What does this mean for foreign businesses in China? It means that your unknowns will outnumber your knowns this year. Will there be repercussions in China for businesses that pulled out of Russia? Will there be increased restrictions on doing business in China from the U.S. and European governments? Multinationals will have to closely monitor politics and geopolitical pressures while keeping their business plans flexible and developing an ability to pivot quickly when needed.
