US-based Kingland Systems, specializing in data management and regulatory compliance for financial services, insurance, and agriculture, has announced the closure of its subsidiary office in China. The decision, which came as a shock to the local workforce, will result in the termination of all 151 employees.
Employees were informed of the closure on Wednesday. The company has committed to providing the legally required severance pay plus an additional month’s salary. Despite the abrupt announcement, Kingland Systems has not offered any explanation for the closure and has not provided any immediate comment.
This move comes in the wake of increasingly challenging economic conditions in China, coupled with rising geopolitical tensions. New regulations, such as stricter data-security laws and an anti-espionage law, have made operating in China more difficult for foreign businesses.
The economic outlook in China has been bleak, with foreign direct investment (FDI) seeing a significant decline. In the first quarter of this year, FDI dropped by 26% compared to the same period last year, amounting to 301 billion yuan (US$41.6 billion). These factors have led many foreign firms to either exit the Chinese market or consider reducing their presence since the COVID-19 pandemic.
Data from Qichacha, a corporate data provider, indicates a growing trend of foreign companies reevaluating their business strategies in China due to these pressures.
The closure of Kingland systems reflects broader concerns among foreign businesses about the viability of continuing operations in China under current conditions.
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