DECOUPLING: China’s rising cost of business is prompting some companies to leave.

China’s personal information protection law, implemented this month, is the latest factor adding to a challenging political environment for businesses operating in the country and altering the cost-benefit analysis. While the untapped business potential of 1.4 billion consumers was once an irresistible draw, this is increasingly changing.

James Zimmerman, a Beijing-based American lawyer, said that the China market had become “less and less palatable for Western companies” because of “reputational risks of operating in an environment with extreme content censorship, and tighter regulatory conditions.”

The trade war brought politics into U.S.-China business to a much greater degree, with Beijing and Washington wielding tariffs and consumer product boycotts in their power struggle. Domestically, Beijing has launched a populist campaign against big business, effectively making the market less profitable for many companies under stricter new regulations.

Previously: China Is Becoming The Soviet Union.