Despite Trump’s growing tensions and pressure, US companies are sticking to China

09/09/2020 World


In a survey released Wednesday by the American Chamber of Commerce in Shanghai, about 92% of people said they were committed to staying in the country even as fractures in U.S.-China relations continued.

According to the findings, the U.S. survey. More than a quarter of companies said they expect U.S.-China trade tensions “indefinitely”, up from 17% a year earlier. Meanwhile, about a fifth of respondents said they expect the stress to last three to five years. Which compares with 13% in 2019.

Only 14% of companies said they think the issue will be resolved in a year.

MHM Shanghai said in a report that “this negative sentiment is a matter of concern for broader US-China relations,” outlining the responses of more than 40,040 companies. The group said it conducted its survey between June and July, just months after the countries announced the initial trade agreement, but only after the “widespread cold” began.

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

US-China relations have reached historic lows over the past few months as countries spark on growing issues ranging from the origins of the coronavirus epidemic to human rights issues in Hong Kong and Xinjiang to control technological control.
In July, US President Donald Trump ended the United States’ special trade relationship with Hong Kong, which in the past exempted the city from some tariffs, among other conveniences. That month, both countries also ordered the closure of each of their consulates in Houston and Chengdu.
Last month, Washington allowed government officials to accuse Hong Kong of undermining Hong Kong’s autonomy. Trump, meanwhile, issued executive orders threatening to ban two popular Chinese-owned apps, Ticket OK and WeChat, from operating in the United States.

About 32% of survey respondents said the sourcing relationship of US-China relations is affecting their ability to retain staff in China. Some industries also said they would reduce investment in China due to uncertainty over trade issues.

China's factory output has grown at a strong pace in almost a decade. But weak spots remain
But leaving the country is still largely out of the question – even though Trump ordered them to do so last year and this week there is music to ‘decoupling’ the world’s top two economies.
China still provides a lot of benefits to industries that live on the land there. Some companies focus on working in the developed middle class of the country, while others are still dependent on the country for production. In this year’s MH Ham survey, the proportion of companies that said China delivered a significant source of their global profits rose 9.4% to 32%.

About %%% of companies that responded to the survey said they had no plans to move their investments elsewhere. Few people named Southeast Asia as their top choice.

Less than C% of respondents stated that they plan to return to operations in the UK, the MMCM said. No, that made it a “fourth choice”.

“American companies still see the Chinese consumer market as a great opportunity,” Kerr Gibbs, president of the American Chamber of Commerce in Shanghai, said in a statement with the data. He added that the country has recently started several industries for foreign companies, including insurance and asset management.

Gibbs added that U.S. businesses in China would like to see both countries resolve their outstanding issues quickly and reduce tensions. “A working cooperative structure for the next decade would be a good place to focus on discussions.”

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