US Companies are sticking with China despite rising tensions

American companies in China are feeling increasingly pessimistic about trade tensions between Washington and Beijing. But very few want to uproot their business in the world’s second biggest economy.

Here are some results of the survey findings, released 2020-09-09 by the American Chamber of Commerce in Shanghai:

1. 92% of respondents said they were committed to remaining in the country even as the US-China relationship continues to fracture.
2. 25% said that they expected US-China trade tensions to last “indefinitely,” compared to about 17% a year ago.
3. 20% said they expected the tensions to last for three to five years. That compares with 13% in 2019.
4. 14% of companies said they thought the issue would be resolved within a year.
5. 32% of survey respondents said that the souring US-China relationship is affecting their ability to retain staff in China. Some businesses also said they would lower investment in China due to uncertainty about trade issues.
6. the proportion of companies that said China had delivered a significant source of their global profits jumped by 9.4%, to 32%.
7. 79% of companies that responded to the survey said they had no plans to move their investments elsewhere. The few that did named Southeast Asia as their top choice.
8. Less than 5% of respondents said they planned to return operations back to the United States, making it the “fourth-choice location,”

“What is likely underpinning this sense of negativity is concern about broader US-China relations,” AmCham Shanghai said in a report, which outlined responses from more than 340 companies. The group said it conducted its survey between this June and July, just months after the countries announced an initial trade agreement, but as “a wider chill” began.

The annual survey is conducted among the 1,400 companies that are members of the American Chamber of Commerce in Shanghai, a non-profit organization which advocates for free trade and aims to promote US-China commercial ties.

Reference:

CNN, 2020-09-09, “US Companies are sticking with China despite rising tensions and pressure from Trump”