Despite improved confidence in China’s near-term economic outlook, survey results continue to show that bilateral tensions and regulatory challenges keep U.S. companies reluctant to invest more in China. There is.
Nearly half of U.S. companies surveyed have no plans to increase or reduce investment in their Chinese operations, according to a survey released Thursday by the American Chamber of Commerce in China (AmCham). I replied that I had no intention of doing so.
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In place of the uncertain policy environment that dominated concerns last year, nearly a third of the 343 members surveyed said they have no investment plans for 2024, particularly in the high-tech and R&D sectors. The main reason for the reduction was uncertainty in the US-China economic relationship. said Amcham.
“Despite the expansion of bilateral trade in recent years, mistrust between the United States and China remains high and relations are strained,” said Sean Stein, chairman of AmCham China. “The need for accurate information has never been greater.”
The Chinese market remains important to U.S. companies, with half of those surveyed viewing it as a top three investment destination in the world. Additionally, 77 percent of members across all sectors were not considering moving manufacturing or sourcing outside of China.
AmCham President Michael Hart said supply chain disruptions are a major reason for U.S. companies’ investment decisions.
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“What we’re seeing is that a certain amount of U.S. investment in China and foreign investment is driving Chinese companies to want their supply chains to be more secure, more resilient, more robust. It’s driven by desire,” Hart said. “Therefore, companies that want to remain part of the supply chain have a choice. [by Chinese firms]: “Either move production closer to where we are, or find someone who will.”
“And it’s not because of industrial policy or any other reason,” he said. “The reason Chinese companies want that kind of security is for their own benefit.”
Other top concerns include uncertainty around risk management, the policy environment, trade tensions and market access barriers, according to the survey.
The two countries have strengthened cooperation since last year, including meetings of the Financial and Economic Working Group, which was launched in September after U.S. Treasury Secretary Janet Yellen’s visit to Beijing to foster regular communication.
However, the trade outlook remains uncertain due to decoupling talks, technology wars and export controls.
While our members hope that both governments can tone down their voices and pursue effective, high-level dialogue, we continue to urge the Chinese government to treat U.S. companies fairly and engage more effectively with the foreign business community. He said he was looking for it.
Despite improvements from 2022, 57% of businesses lack confidence in China opening its markets further to foreign companies, while acceptance is mixed for U.S. businesses, with 39% of businesses lacking confidence in China opening its markets further to foreign companies. feel unwelcome in China and have expressed concerns about the market. Meanwhile, 31 percent of members said they felt more welcome, an increase of 13 percent.
Other regions reported improved talent retention rates but remained plagued by bilateral tensions, members said.