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"Companies are market-oriented," Gao said. "China has a large-scale market, complete industry-supporting capabilities, sufficient human resources and well-developed infrastructure. The so-called' reducing dependence on China 'does not conform to market rules and will not become the basis for corporate investment decisions."

"Complacency is our greatest threat and any business that thinks they are above the law will face serious penalties," Dominello warned.

"China's smartphone market is declining because consumers are holding on to their phones for longer, operators like China Mobile have reduced their smartphone subsidies, and device makers such as Huawei have launched fewer 'wow' models to tempt shoppers back into retail stores. Some consumers are finding their smartphones 'good enough' and are pausing on upgrading," Neil Mawston, executive director at Boston-based Strategy Analytics, said in an email.

"Companies were required to go to certain offices and fill different documents to complete the licensing procedures, which is a time-consuming and labor-intensive task for investors from other cities," said Chen Pengyun, chairman of a Tianjin-based vehicle trading company.

"Customers aspire for something not necessarily exclusive but unconventional. This is when influencers kick in, with consumers putting a lot more trust in online key opinion leaders in their decision-making journeys," Shen said.