China Exit Ban on Wells Fargo Executive Stokes Foreign Business Anxiety
Economic policy ministries in China have been trying to persuade multinationals to increase their investment in China. That is an effort that the exit ban and prison sentence are likely to make harder, especially because foreign enthusiasm was already waning. A real estate crash has depressed consumer spending; regulatory obstacles hamper sales in China by foreign companies; and many industries face severe overcapacity.
China has said little about either executive. Eric Zheng, the president of the American Chamber of Commerce in Shanghai, called for the release of more details in the Wells Fargo case in order to reassure the foreign business community.
Wells Fargo has suspended travel by its executives to China. Many Japanese companies have already been limiting travel to China and have been withdrawing family members of managers stationed in China.
Sean Stein, the president of the U.S.-China Business Council, said that if more information did not emerge soon in the Wells Fargo case, other American businesses might also discourage their executives from going to China.
'In cases like this, transparency is extremely important, or else there will be a spillover effect on other companies' travel policies,' he said in a telephone interview.
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