Microsoft faces downturn in China

Microsoft has faced geopolitical pressures that led to a decline in its presence in the Chinese market. Over the past five years, the company has closed at least 15 branches and joint ventures, and it is considering complete withdrawal in 2023 due to rising risks and minimal returns—accounting for only 1.5% of its global revenues in 2024. These shifts come amid escalating tensions between Washington and Beijing, as China seeks to replace Windows and Office with local software for security reasons, stemming from accusations that Washington employs American software for espionage. Despite this, Microsoft has decided to remain active in the Chinese market by supporting local private companies and expanding internationally, relocating some of its sensitive operations to labs in Canada, Singapore, and Tokyo. The company has also offered its Chinese engineers the option to move to Western countries, but only a third accepted, while the rest preferred to work within local institutions.

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