Chinese companies in the US under pressure

pte20220704003 Business / finance, trade / service

According to the study, the difficult relationship between the two countries is a bigger challenge than the pandemic

Container: Trade relations between China and the US are strained (Photo: pixabay.com, AbsolutVision)

New York (pte003 / 07/04/2022/06: 10) –

Chinese companies operating in the United States face heavy loads. In a survey conducted by the China General Chamber of Commerce (CGCC) – USA http://cgccusa.org, three quarters of the companies surveyed mentioned “the stalemate in bilateral relations between the USA and China” as their main concern for future business activities in USA.

Fewer chances dreaded

According to the study, companies’ optimism about future opportunities has diminished, although companies are slowly recovering from disruptions since the COVID-19 pandemic. Concerns about bilateral relations outweigh the concerns about COVID-19 and its implications, which 51 percent of companies surveyed describe as a challenge. “In a complex, changing, and increasingly competitive environment, the activities and investments of Chinese companies in the United States paint a mixed picture of a slight reversal of performance and increasing uncertainty caused by the turbulent circumstances of 2021,” the CGCC said.

Overall, the CGCC surveyed 111 of its members in 40 U.S. states. More than 60 percent of companies are active in the consumer, industrial, energy, financial and real estate sectors. Just over half (54 percent) of Chinese companies have reported an increase in sales for the past year, returning to pre-pandemic levels. Nearly half of companies expect sales growth over the next two years, while 27 percent of respondents expect more business investment by 2022.

Broad optimism evaporated

At the beginning of President Joe Biden’s tenure, Chinese companies’ expectations of a strong economic recovery were generally positive amid low unemployment, higher wages and more job opportunities, according to the survey. However, cautious optimism was short-lived and is now on the wane as companies face ongoing trade disruptions, an increasingly uncertain regulatory environment amid a deteriorating US-China relationship and difficulties in attracting and retaining talent.

The US-China Business Council also found in its annual membership survey for 2021 that “for the fourth year in a row, the tense relationship between Washington and Beijing represents one of the biggest challenges” for US companies operating in China. Still, 24 percent of Chinese companies surveyed made new investments in the U.S. in 2021, with most funds going to the energy, IT and finance sectors. For nearly a decade, most Chinese companies entering the U.S. market have made greenfield investments, creating new business units instead of acquiring existing ones, helping to create local jobs.

“Attractive investment environment”

According to Xu Xueyuan, Minister at the Chinese Embassy in Washington, US companies have set up more than 70,000 companies in China, while nearly 3,000 Chinese companies have come to the United States and contributed to the local economy, job creation and community prosperity. Speaking at the study’s release event, Xu said she hopes the United States will meet China halfway to create an “attractive and viable” investment environment where Chinese companies can thrive. This includes lowering tariffs instead of raising more, opening markets instead of decoupling them and building walls and barriers and conducting fair competition instead of imposing sanctions.

The White House, for its part, has put trade ties with China, which has been accused of serious human rights violations, under scrutiny (press release reported: http://pte.com/news/20210826003). China’s role as Russia’s economic pillar is obviously not conducive to a positive relationship with the United States (press release reported: http://pte.com/news/20220323004).

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