American companies say the business environment in China has worsened
白云追月素
发表于 2023-9-27 17:11:01
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According to a survey of member companies by the US-China Business Council, rising bilateral tensions are affecting every aspect of US companies' business in China, including damaged sales, lower profits, and cancelled or delayed investments.
According to the council's latest annual survey, the proportion of companies expressing pessimism about the prospects of their China business over the next five years rose to a new high of 28%, up from 21% last year. The percentage of companies with an optimistic view fell to a record low of 49 percent.
More than a third of the companies surveyed said they had reduced or suspended investment plans in China in the past year, a record high and up from 22 per cent in last year's survey, signalling further declines in the business presence of US companies in the coming years. These decisions were made because of the increased costs and uncertainty of doing business in China, as well as increased restrictions on selling products in the Chinese market.
The annual survey, conducted in June and July, is based on a survey of the council's 117 member companies, 39 percent of which reported at least $1 billion in revenue from their China operations.
"Most companies remain profitable in China and recognise the importance of the Chinese market to their global competitiveness." The commission said. "The speed of the rebound in US business confidence and future investment will depend on the policy direction of policymakers in China and the US."
The US-China Business Council said most of the companies in the survey are large US multinationals that have been operating in China for decades.
Many U.S. companies had hoped for a rebound in business this year after a long period of tight containment restrictions. However, they face additional obstacles posed by China's slow economic recovery and geopolitical tensions, including more assertive Chinese domestic policies related to U.S.-China competition.
To stop China from using advanced technology for military purposes, Washington imposed strict restrictions on cutting-edge semiconductors and manufacturing equipment late last year.
The Chinese government has responded by imposing export restrictions on key minerals used to make semiconductors and increasing pressure on U.S. companies such as Micron Technology (MU) and companies that conduct due diligence for U.S. investors. In August, the Biden administration unveiled a plan that would prohibit or require notification of U.S. investments in China in certain sensitive technology areas.
In the latest survey, 43 per cent of companies surveyed said business conditions in China had worsened over the past 12 months. Compared to three years ago, 83 percent of companies reported lower confidence.
A survey conducted between May 31 and June 30 by the American Chamber of Commerce in Shanghai found that slightly more than half of the 325 members surveyed were optimistic about their business prospects over the next five years, This is the lowest level since the survey began in 1999.
More than half of the companies surveyed by the US-China Business Council reported a drop in sales due to customer uncertainty about the continuity of supply amid trade tensions between the US and China. A third of companies reported falling sales as Chinese customers abandoned their products because of rising nationalism.
About a third each said investments in China had been delayed or cancelled, supply chain changes and increased regulatory scrutiny.
China's sweeping rules on data, personal information and cybersecurity are particularly troubling to businesses, with 97 percent of respondents citing such concerns.
The US-China Business Council said restrictions on cross-border data transfers and overbroad data security concerns have affected companies' investment plans. The commission said China's data policies hindered the integration of local and global operations.
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