The Chinese slowdown is forcing Western companies to take a hard look at their businesses there, leading many to reduce investments, costs and product lines and to tackle increasing bad debts.
Double-digit growth rates during the first decade of the millennium lured scores of Western companies to invest heavily in China. But growth has slowed sharply, hitting demand and raising doubts about the financial health of Chinese companies.
A recent equities market rout has dashed hopes China will, in the coming years, return to the robust growth it saw in the past.
"We had five fabulous years in China, of course, where we grew strong double-digit, and it has been gradually slowing down. Currently, in China we had negative order intake," Frans van Houten, chief executive of Dutch electronics group Philips NV, told analysts last week.
"Going forward, we need to be much more modest on expectations with regard to China growth," he said.
The size of China's economy means executives are not talking about withdrawing from the market but they say business must change.
Strategies vary across companies and sectors. Some have focused on cost reductions — General Motors flagged "material cost performance" in China to investors. Jan Gurander, acting CEO of Sweden's AB Volvo, said this was easier to achieve in China than in Europe, where workers enjoy more protections and factory shutdowns can be politically sensitive.
Some companies are rethinking their product lines. French dairy group Danone told investors it was offloading its Chinese business, Dumex, which operates in a highly competitive commoditized market, to a joint venture partner.
Will Hallyer, of Strategy Consultants, said cost cuts are shifting. Companies are now focused on costs.
"It had been more of a land grab mentality — buy a position, invest heavily in growth and have confidence that at some point you'll be able to make money," he said.