Current:Home > InvestUS firms in China say vague rules, tensions with Washington, hurting business, survey shows -消息
US firms in China say vague rules, tensions with Washington, hurting business, survey shows
View
Date:2025-04-23 10:10:11
American companies operating in China view tensions with Washington over technology, trade and other issues as a major hindrance for their businesses there, according to a survey by the American Chamber of Commerce in Shanghai.
The survey released Tuesday showed a continued downgrading of China’s importance as an overseas destination for investment, even though two-thirds of the 325 companies responding said they had no immediate plans to change their China strategy.
Just over one in five of the companies surveyed said they were decreasing their investment in China this year, with the top reason being uncertainty about the U.S.-China trade relationship, followed by expectations of slower growth in China, it said.
Overall, the survey showed sentiment worsened from last year, when companies were embroiled in disruptions from “zero-COVID” policies that caused parts of entire cities, transport networks and travel to be shut down, sometimes for weeks at a time.
Such disruptions were a major “push factor” that companies cited in expanding their operations outside China, the survey showed.
While 52% of those surveyed said they were optimistic about their five-year business outlook in China, that was the lowest figure since the American Chamber of Commerce in Shanghai began the annual survey in 1999.
Nearly nine in 10 companies said rising costs were a big challenge.
Companies named geopolitical tensions as a major concern, followed by an economic slowdown that has foiled hopes for a strong, post-pandemic boom.
Intensifying competition has also been worsened by policies that favor local companies over foreign ones and courts that tend to favor Chinese companies in decisions on protection of intellectual property such as patents and trademarks.
Companies face a growing threat from “nimble, innovative local businesses and state-owned enterprises, which have enjoyed stronger support in recent years and whose consolidation has made them increasingly competitive with large multinational corporations,” the survey said.
Companies that are limiting their commitment to the China market included those selling technology hardware, software and services — an area hit hard by trade sanctions imposed in the name of national security, mostly by Washington.
Others include education and training — industries that have suffered in a crackdown on private education companies, and banking and other financial industries.
Southeast Asia ranked as the top choice for the 40% of companies shifting their investments to places outside China, followed by the U.S. and Mexico, the survey said.
In the 2022 survey, 40% of manufacturers surveyed said China was among their top three investment destinations, while this year that dropped to 26%.
American companies also are urging Chinese authorities to clarify various regulations, saying that gray areas leave companies uncertain over what is permitted and what may have been outlawed as rules changed.
“Companies are much more hesitant,” said Sean Stein, AmCham Shanghai’s chairman. He noted that the problem was acute for financial and pharmaceutical companies.
“What businesses need above all else is clarity and predictability, yet across many sectors companies report that China’s legal and regulatory environment is becoming less transparent and more uncertain,” Stein said in an online briefing before the report was released.
The survey results echoed those found by other foreign business groups. Foreign companies are on edge following unexplained raids on two consulting firms and a due diligence firm. The expansion of an anti-spying law and a push for self-reliance in technology also are seen as risks.
Foreign investment into China fell 2.7% from a year earlier in the first half of 2023, according to official data.
A survey by the British Chamber of Commerce in China found 70% of foreign companies want “greater clarity” before making new investments. The European Union Chamber of Commerce in China said its members are shifting investments to Southeast Asia and other targets.
Despite the relatively gloomy perspective evinced by the survey, some things have improved, American Chamber of Commerce members said.
China has extended preferential tax breaks for expatriates, such as tax write-offs for housing and educational expenses until the end of 2027.
A recent overall improvement in China-U.S. relations has occurred since the survey was completed, they said.
veryGood! (3)
Related
- The Louvre will be renovated and the 'Mona Lisa' will have her own room
- Paul Rudd, Jay-Z and More Turn Super Bowl 2024 into a Family Game Night
- Rob Gronkowski Thinks Super Bowl Ticket Prices Are Ridiculous Even for NFL Players
- Digital evidence leads to clues in deaths of two friends who were drugged and dumped outside LA hospitals by masked men
- Trump's 'stop
- Gallagher says he won’t run for Congress again after refusing to impeach Homeland Security chief
- “Diva” film soprano Wilhelmenia Wiggins Fernandez Smith has died at 75
- Meet Speckles, one of the world's only known dolphins with extremely rare skin patches
- Toyota to invest $922 million to build a new paint facility at its Kentucky complex
- Score a Look at 49ers Player Kyle Juszczyk and Wife Kristin Juszczyk’s Stylish Romance
Ranking
- Person accused of accosting Rep. Nancy Mace at Capitol pleads not guilty to assault charge
- NFL schedule today: Everything you need to know about Super Bowl 58
- “Diva” film soprano Wilhelmenia Wiggins Fernandez Smith has died at 75
- How much does a Super Bowl commercial cost in 2024? 30-second ad prices through history
- Taylor Swift makes surprise visit to Kansas City children’s hospital
- Breaking down everything we know about Taylor Swift's album 'Tortured Poets Department'
- For Las Vegas, a city accustomed to glitz, Super Bowl brings new kind of star power
- Taylor Swift seemingly on way to Super Bowl to root for Travis Kelce after Tokyo shows
Recommendation
Chuck Scarborough signs off: Hoda Kotb, Al Roker tribute legendary New York anchor
Southwest winter storm moves into New Mexico; up to foot of snow possible in northeast mountains
Who is favored to win the 2024 Super Bowl, and which team is the underdog?
'Jeopardy!' boss really wants Emma Stone to keep trying to get on the show
The city of Chicago is ordered to pay nearly $80M for a police chase that killed a 10
The S&P 500 hit a new record. Why the milestone does (and does not) matter for your 401(k)
'NCIS' Season 21: Premiere date, cast, where to watch new episodes
Kanye West criticized by Ozzy Osbourne, Donna Summer's estate for allegedly using uncleared samples for new album