In one of the latest moves by U.S. companies pulling out of the Chinese market, International Business Machines Corp. (IBM) announced the closure of its key research division in China. The move will affect more than 1,000 employees.
Change of focus
IBM $IBM has decided to close two business lines focused on research and development and testing. Instead, the company plans to focus on providing services to private enterprises and select multinational companies operating in China. The move comes at a time when an increasing number of US companies are deciding to cut back their activities in the world's second-largest economy.
Reasons for withdrawing from China
IBM's decision comes in the context of a broader economic slowdown in China, increased regulatory scrutiny and growing pressure to replace foreign technology with domestic alternatives. This trend can also be seen in other major players such as Morgan Stanley, which has moved some of its operations abroad, or in the decline in foreign…