A weak economy and falling business confidence among foreign companies in China appear to have taken a toll on a small US software company’s outpost in the northeastern port city of Dalian.
Kingland Systems is closing its office in the second-largest city in Liaoning province – its first outside the US – and sacking its entire local workforce, according to two sources familiar with the matter.
The office, which opened in 2012, had 151 employees as of 2022, according to business registry records on Qichacha, a corporate data provider. Kingland, a technology solutions provider, specialises in data management and regulatory compliance for industries including financial services, insurance and agriculture.
The Iowa-based company informed its Dalian-based employees about the decision on Wednesday and offered them legally required severance pay plus one month’s salary, according to one of the sources and records of conversation between staff that were seen by the Post.
Employees who spoke to the Post said the company did not elaborate on the reasons behind the move, and some said it came as a surprise.
Kingland did not immediately respond to a request for comment on Thursday.
The company joins a growing number of foreign firms in China that have either exited or are mulling a departure from the country since the Covid-19 pandemic years, when stringent infection control measures eroded investors’ confidence.
Despite Beijing’s efforts to project a welcome image, foreign business confidence in China hit a record low last year, according to an annual survey by the European Chamber of Commerce published earlier this month.
Only 15 per cent of companies polled saw China as a top destination to invest, while 42 per cent said they planned to expand their operations there in the year ahead. Both numbers were the lowest on record.
Respondents in the information and communications technology sector showed the least interest in making further investment in China, the survey showed, reflecting concerns over the country’s stringent data policies and a national drive towards technological self-reliance that places emphasis on domestic products.
Many foreign companies were considering moving their investments out of China to Southeast Asia, India, Europe and North America, the survey indicated.