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Monday, December 4, 2023

US Businesses in China Affected by Trade Tensions but Remain Committed: AmCham China Survey

BusinessUS Businesses in China Affected by Trade Tensions but Remain Committed: AmCham China Survey

According to a survey released on Wednesday by the Beijing-based American Chamber of Commerce in China (AmCham China), most US-based companies operating in China do not have any plans to relocate their supply chains, despite ongoing bilateral tensions posing a significant challenge for them. The document, titled the 2023 China Business Climate Survey Report, found that positive bilateral relations are extremely important to the businesses of AmCham China’s member companies.

The survey revealed that half of the chamber’s member companies are pessimistic about the future of China-US relations in the coming year, with three-quarters of members reporting that their businesses have been impacted by trade tensions. For example, 24 percent of AmCham China’s company members from the technology and research and development sectors cited deteriorating China-US relations as the primary cause of lower margins, worse than the impact of COVID-19 in that sector.

While 74 percent of the chamber’s members are maintaining operations in China, emphasizing a long-term commitment to the Chinese market, they stated that improved China-US relations are vital for business growth, and both governments have a critical role to play. Their priority suggestions for the US and China governments are to refrain from aggressive rhetoric and tit-for-tat actions towards each other to establish a floor under the deteriorating relationship.

Decoupling from China would make it difficult for US companies to operate in the Chinese market, enjoy its benefits, and seize opportunities to expand their innovation capability. This would harm the interests of consumers and companies in both countries, as well as world economic growth, according to Fang Ning, a researcher at the Institute of Political Science of Chinese Academy of Social Sciences in Beijing.

HSBC’s recent survey revealed that as more markets resume normal travel after three years of combating COVID-19, a third of international citizens plan to relocate to another destination or return to their home market within the next 12 months, whereas 75 percent of survey respondents in the Chinese mainland said they would stay in their host location during the same period. This proportion ranks among the highest across the nine host locations surveyed, demonstrating that the Chinese mainland market is attractive to international citizens.

The China Council for the Promotion of International Trade conducted a survey of 390 foreign companies and business chambers in China, with 98.2 percent expressing confidence in China’s economic development in 2023. Harley Seyedin, president of the Guangzhou, Guangdong province-based American Chamber of Commerce in South China, said that China’s economy will be a crucial locomotive in promoting global economic growth in 2023.

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