China’s Business Environment: A Mixed Bag for Global CEOs

Global CEOs are touting China’s safety and reliability in terms of market size, supply-chain resilience, and talent. However, they remain cautious about the evolving regulatory landscape and geopolitical headwinds. According to the PwC 28th Global CEO Survey, 68% of surveyed CEOs said AI-related projects will increase investment in China in the next 12 months, while 45% expect climate-tech spend to rise.

Despite the strong investment appetite, regulatory friction remains a significant concern. Over one-quarter of CEOs point to regulatory complexity and lower ROI as the top barriers. U.S. firms rank regulatory uncertainty among their top three risks, with 71% citing licensing delays and 66% citing overlapping regulations.

Geopolitical risk adds another layer of uncertainty, with export-control tightening and data-flow restrictions already affecting approximately 45% of EU-based firms. While the Chinese government is optimizing the policy framework and providing subsidies, new legal requirements, such as the 2024 Company Law amendment, create compliance burdens for foreign entrants.

In conclusion, global CEOs are cautiously optimistic about China’s business environment, citing its large market and comprehensive industrial chain as attractive features. However, regulatory friction and geopolitical risk remain significant concerns that must be addressed to unlock the full potential of foreign direct investment and GDP growth.

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