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A US software company is closing its outpost in China, as foreign business confidence reaches a record low

A US software company is closing its outpost in China, as foreign business confidence reaches a record low

A weak economy and declining business confidence among foreign companies in China appear to have affected the location of a small American software company in the northeastern coastal city of Dalian.

Kingland Systems is closing its office in Liaoning Province's second-largest city — its first outside the United States — and laying off 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 at Qichacha, a company data provider. Kingland is a technology solutions provider, specializing in data management and regulatory compliance for industries including financial services, insurance and agriculture.

The Iowa-based company notified its employees in Dalian of the decision on Wednesday and offered them a legally required severance package in addition to one month's salary, according to one source and records of conversations between employees seen by the newspaper.

A port in Dalian, Liaoning Province, northeastern China. Photo: Xinhua

Employees who spoke to the newspaper said that the company did not explain the reasons behind this move, and some said it came as a surprise.

Kingland did not immediately respond to a request for comment Thursday.

The company joins a growing number of foreign companies in China that have either exited or are considering exiting the country since the years of the Covid-19 pandemic, when strict infection control measures eroded investor confidence.

Factors such as bleak economic outlook, geopolitical tensions, New counter-espionage law Data security regulations further dampened sentiment.
Foreign direct investment in China Revenues during the first quarter of this year fell by 26 percent compared to the previous year, reaching 301 billion yuan (41.6 billion US dollars), according to official data.

Despite Beijing's efforts to project a welcoming image, foreign business confidence in China reached a record high last year, according to an annual survey by the European Chamber of Commerce published earlier this month.

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Only 15 percent of companies surveyed saw China as their top investment destination, while 42 percent said they plan to expand their operations there in the next year. Both numbers were the lowest ever.

The survey showed that respondents in the ICT sector showed the least interest in making further investment in China, reflecting concerns about the country's strict data policies and a national trend towards technological self-reliance that focuses on domestic products.

The survey indicated that many foreign companies are considering moving their investments from China to Southeast Asia, India, Europe and North America.

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