Companies from IBM to Starbucks are struggling with new obstacles in China as Communist Party officials tussle over the direction and depth of economic reforms.
China's state-controlled media last week accused Starbucks Corp. with charging too much for coffee and said Samsung Electronics Co.'s smartphones don't work properly. IBM's China revenue slipped 22 percent in the third quarter, contributing to the first-ever sales decline in the company's growth-markets division, as state-owned companies started delaying orders, including mainframes and servers.
"The operating environment for foreign firms has deteriorated in the last year in a serious way," said Shaun Rein, managing director of China Market Research Group in Shanghai. "In my 16 years in China, it's some of the worst business sentiment among foreign executives. They don't feel as welcome as they used to."
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