© Reuters. FILE PHOTO: People cross a street near office towers in the Lujiazui financial district in Shanghai, China, February 28, 2023. REUTERS/Aly Song/File Photo
(Reuters) -United States Commerce Secretary Gina Raimondo has said U.S. companies have raised concerns that China has become “uninvestible”, pointing to fines, raids and other actions that have made it too risky to do business in the world’s second-largest economy.
Major global firms ranging from banks to chipmakers are taking a largely cautious stance on their China business amid a frail recovery of the country’s economy from a pandemic slowdown.
Following are comments from some of the top firms on their China business during the latest reporting season:
Estee Lauder (NYSE:) The luxury firm forecast a weak annual profit, owing to a
slower-than-expected rebound in Asia travel retail business.
Haleon The Sensodyne maker said sales from Fenbid pain reliever gel
doubled in China in the first half.
Tapestry (NYSE:) Coach handbags maker said it expects to benefit from a
recovery in demand from the “highly profitable region” of
China this fiscal year.
Starbucks (NASDAQ:) The coffeehouse chain saw a sharp recovery in China, with
third-quarter comparable sales surging 46%.
Marriott The U.S. hotel operator said rebounding demand in China
International boosted its earnings.
Merck & Co The drugmaker said use of Gardasil in China was the biggest
growth driver for the human papillomavirus vaccine.
Procter & Gamble (NYSE:) The Tide detergent maker reported a 1% drop in its
fourth-quarter volumes, mainly due to weaker demand in the
Greater China region.
Intel (NASDAQ:) “The China market, I think, has been well reported, hasn’t
come back as strongly as people would have expected overall,”
chipmaker Intel CEO Pat Gelsinger said.
AbbVie Inc (NYSE:) The Botox maker said it has seen rates for aesthetics
treatments in China fully recover to pre-COVID levels and
continues to anticipate strong growth through the rest of the
year in the country.
Mastercard (NYSE:) Inbound cross-border travel to China stood at nearly 50% of
2019 levels, while outbound travel was nearly 70%, the company
said.
Coca-Cola (NYSE:) The company saw strong demand for some juice business in China
but also flagged destocking activity in the second quarter.
Thermo Fisher (NYSE:) The company witnessed significantly slower economic activity
Scientific in China during the second quarter. “We think it’s appropriate
to assume that this condition remains in place for the
remainder of the year,” said CFO Stephen Williamson.
Visa (NYSE:) “Looking at Mainland China specifically, cross-border travel
continued to improve but remains well below 2019 levels,” CFO
Vasant Prabhu said.
3M Co The industrial conglomerate flagged continued weak appetite
for consumer electronics demand in China.
Dow Inc The chemical maker said the anticipated rebound following the
end of pandemic curbs has yet to fully materialize.
NXP Semiconductors (NASDAQ:) The chipmaker said China’s export curbs on certain gallium and
germanium products did not impact the company.
Citigroup (NYSE:) The lender called it the “biggest disappointment” as growth
decelerated after an initial post-reopening pop.
Royal Bank of Canada’s largest bank forecast slowing growth, partly due to a
Canada slowdown in China and elevated climate and geopolitical risks.
BHP Group (NYSE:) The world’s biggest miner saw strong steel demand from some
sectors in China, but said it was too early to assess the
impact of Beijing’s policy measures on the housing market.
Toyota The automaker said foreign exchange rate fluctuations and its
response to price cuts in China hurt its results there.
Panasonic (OTC:) The battery supplier said it saw no sign of a full-fledged
recovery in the factory automation sector in China, and that
it would take more time for areas such as servers, data
centres and ICT to recover overall.
Volkswagen (ETR:) The German carmaker cut its full-year sales target after sales
dipped in China, its top market.
Anglo American (LON:) The global miner said it has been surprised by how slow the
reopening of China has been but believed a recovery was
underway.
L’Oreal The Chinese market is “really picking up,” although “not at
the speed everybody had hoped for,” L’Oreal CEO Nicolas
Hieronimus told Reuters.
Rio Tinto (NYSE:) The world’s biggest iron ore producer struck a cautiously
optimistic tone on China as the government has pledged more
policies to boost growth.
Nissan (OTC:) CEO Makoto Uchida said China sales outlook for the automaker
was now falling far below production capacity.
LG Energy Solution The company warned it faces weaker EV demand in China than
previously expected.
LVMH The French luxury giant logged a strong rebound in China
during the second quarter.
ABB The engineering firm witnessed fewer new orders from China in
the quarter and said some customers were shifting investments
to other parts of Asia due to geopolitical tensions.
