Major Japanese tire manufacturer Bridgestone announced that it would close a factory in Huizhou, Guangdong, China, at the end of December.
The reason, according to Bridgestone, stemmed from fierce tire value competition in China.
According to China Auto News, the company’s revenue fell by double digits in 2020, resulting in a net loss of 23.3 billion yen (approximately $220 million). It was the first time the firm had suffered losses in seven decades.
Bridgestone’s case only marked a wave of foreign entities withdrawing from China.
Economic experts said the Chinese Communist Party’s policies and cost handling had taken a toll on their desire to remain in the market.
Bi Xin, an expert on China’s economy, told Radio Free Asia that the businesses’ departures from mainland China had gradually begun many years ago.
He said that since the CCP unreasonably increased the prices of land use, real estate leasing, environmental protection fees, electricity, water, tax, and labor costs, China was no longer a desirable place for manufacturing. As a result, foreign enterprises opted to move their factories to lower-cost countries like India and South East Asia.
Additionally, Bi Xin said that the CCP had used its domestic market to extract technological advances from foreign-funded companies for a very long time. Consequently, those companies constantly lost their production technologies and became less engaged in the Chinese market.
Professor Lee Branstetter from Carnegie Mellon University alleged that China has increasingly stolen foreign technologies. The country demands foreign firms disclose their critical technological data to access the vast Chinese market through forced technology transfer.
The regime’s latest enforcement of data privacy law only worsened the situation. The government notorious for its censorship further dictates how companies collect and store data with the policy.
Yahoo had ceased its services in China in November for that reason. Microsoft’s LinkedIn announcing its departure from China was just a month prior, also due to the same concerns.
The CCP’s Personal Information Protection Law outlines basic data collection, use, and storage rules. It allows local officials to seek huge financial penalties against violators. Companies that violate the rules might face a fine of up to $7.8 million or 5% of their annual revenue. The rules are purportedly aimed at protecting user privacy but also work to serve the regime’s own interests in matters that it may characterize as sensitive.