American companies operating in China are growing increasingly optimistic about the country’s economic prospects, but concerned about public relations between Washington and Beijing, according to a survey released yesterday by the American Chamber of Commerce in the People’s Republic of China (AmCham China).
About 59 percent of the members surveyed have a positive outlook for the next two years, an increase of 22 percentage points from the American Chamber of Commerce’s Economic Outlook report in early March. Similarly, 59 percent of members expressed a positive view of the growth of the domestic market in China, down from 42 percent in the previous survey, the non-profit NGO said.
However, 87% of respondents are more pessimistic about US-China relations, down from 73% at the end of last year. Americans’ mixed feelings about relations with China were expressed in a speech last week by US Treasury Secretary Janet Yellen, who called for greater cooperation while airing grievances.
The new American Chamber of Commerce survey in China was conducted April 18-20, and collected responses from 109 companies across China; Responses to the survey released in early March were collected primarily between October and November 2022. The organization has nearly 1,000 members, including Apple, Merck, KKR, Morgan Stanley, Microsoft and Intel.
The most recent survey by the American Chamber of Commerce in China also revealed that the majority of respondents (73%) do not move their supply chains outside of China, while 23% plan or have already begun to do so.
Risk management is the main reason cited by those considering outsourcing, as cited by 44% of respondents, according to AmCham China. About 27% of the survey’s respondents said their company had “re-prioritized” other countries, which was a 21 percentage point increase from AmCham China’s previous survey.
Meanwhile, 51% of the companies said foreign expats were interested in moving to or returning to China after the country’s anti-virus policies expire this year; 68% of members cited bilateral tensions and other geopolitical risks as the number one issue that foreign expats should consider when making their decision. More than a fifth of the respondents said that foreign employees still refuse to accept appointments in China. The lack of international flights is also a major concern, according to 44% of members, according to the survey.
In a sign that China is starting to see increased participation from CEOs around the world after the disruptions related to Covid-19, 43% of respondents said their global or regional executives had been in China since December 2022, AmCham China said. According to the survey, 31% of the members indicated that their international or regional executives will visit China in the coming months.
In a white paper released yesterday, the American Chamber of Commerce in China also found that the impact of the past three years of the pandemic is still being felt across many sectors, despite the removal of Covid-19 prevention measures and travel restrictions. In addition, the Chinese government’s focus on self-sufficiency creates additional uncertainty for foreign companies.
Translated article from the American magazine Forbes – Author: Russell Flannery
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