Even Starbucks Joins: U.S. Companies Continue Withdrawing from the Chinese Market

Following Microsoft and Micron, Starbucks Sells Its Stake
"Geopolitical Risks and Sluggish Domestic Demand Sharply Reduce Investment Appeal"

Major U.S. companies are either withdrawing from the Chinese market or reducing their business presence there. The perception that China is no longer a "golden market" is spreading, as a combination of factors-including prolonged U.S.-China tensions, a slowdown in domestic demand, and stricter regulations-come into play.

On November 3 (local time), Reuters reported that Starbucks has decided to sell up to 60% of its China business stake to the Chinese private equity fund Boyu Capital.

This decision comes just one year after CEO Brian Niccol initiated restructuring following his appointment last year, and it will result in Starbucks transferring a significant portion of its management rights in China to local capital.

Starbucks' move to withdraw is part of a broader trend in which global consumer brands are readjusting their strategies in China amid intensifying U.S.-China competition.

U.S. apparel company Gap sold its underperforming Greater China business to Chinese e-commerce firm Baozun in 2022, and McDonald's sold 80% of its China and Hong Kong operations to Chinese state-owned CITIC Group and U.S. private equity firm Carlyle Group in 2017.

That same year, Yum! Brands also sold its Chinese subsidiary "Yum China," which operates KFC and Pizza Hut, to local investors.

Signs of withdrawal are also emerging in the information technology and semiconductor sectors. Earlier this year, Microsoft closed its artificial intelligence (AI) and Internet of Things (IoT) research lab in Shanghai.

The South China Morning Post (SCMP) reported, "The lab was shut down earlier this year, and an empty office with the Microsoft logo removed has been confirmed," adding that this is the latest example of a major U.S. tech company pulling out of China.

Last month, semiconductor company Micron announced it would withdraw from the data center server chip business in China. This decision was driven by two main factors: the Chinese government's sanctions in 2023, which made local operations difficult, and rising geopolitical tensions, which have reduced the practical benefits of maintaining the business.

Micron stated, "We will continue to supply chips for data centers, automotive, and mobile applications outside China, but will scale back our business within China."