SHANGHAI, Sept 19 (Reuters) – Geopolitics and economic slowdown are fueling pessimism among U.S. companies expanding into China, with the percentage of companies optimistic about the country’s five-year outlook at an all-time low. The survey released on Tuesday found that .
An annual survey released by the U.S. Chamber of Commerce shows that U.S. companies surveyed continued to grow even after COVID-19 containment measures ended, weighing heavily on both earnings and sentiment in 2022. The percentage of respondents who are optimistic about China’s business outlook for the next five years fell to 52%. (Am Cham) in Shanghai.
This is the lowest reported level of optimism since the AmCham Shanghai Annual China Business Report was first introduced in 1999.
“Frankly, if there’s anything that surprised me about this year’s survey, it’s the numbers,” said Shaun Stein, chairman of AmCham Shanghai. “By the time we conducted this year’s survey, much of the illusion that there would be a sustained recovery in economic growth (post-COVID-19) had been shattered.”
Geopolitics remains a major concern for many businesses, with 60% of 325 survey respondents citing U.S.-China tensions as their top business challenge, with China’s economic slowdown the biggest challenge. The number was the same as that listed.
Concerns about the transparency of China’s regulatory environment also grew, with one-third reporting that policies and regulations for foreign companies had worsened in the past year, while when asked about pressure to decouple, many respondents Instead, he cited U.S. government policy.
In recent years, companies have been at the center of the deterioration in relations between the two countries. China has criticized U.S. efforts to block China’s access to advanced technology, and U.S. companies have expressed concern about fines, raids and other actions that put their business in China at risk.
U.S. Commerce Secretary Gina Raimondo said during a visit to China last month that U.S. companies had complained that China had become “uninvestable.”
AmCham’s report also cited geopolitical tensions as the biggest risk to China’s future economic growth, with respondents saying improving U.S.-China relations is the biggest factor improving industry prospects in China. said.
AmCham’s Stein said the survey was conducted before Raimondo’s visit and that since then, companies had become “too pessimistic that there was no way out of[the U.S.’s]continued downturn.” “Isn’t that the case?” he said, indicating that he was starting to reconsider. -China relations)”.
40% of companies, up from 34% last year, are now redirecting or planning to redirect investments that were originally intended for China, primarily to Southeast Asia.
This is in line with a report released last week by the Rhodium Group that found India, Mexico, Vietnam and Malaysia are receiving the bulk of the investment that U.S. and European companies are moving away from China.
Report by Casey Hall.Editing: Alex Richardson
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