US companies optimistic about business in China under Biden, survey finds

BEIJING – The outlook for US businesses in China is improving, both politically and in terms of revenue, the US Chamber of Commerce in Shanghai said in a poll released Friday.

Of 124 business leaders surveyed Nov. 11-15, only two said they were more pessimistic about doing business in China after President-elect Joe Biden won this month.

Just over half, or 54.8%, say they are “more optimistic” and 8.1% are “much more optimistic” given the expected change in President Donald Trump’s administration, according to the survey.

“The majority of our respondents see it as positive,” Ker Gibbs, president of AmCham Shanghai, said in a telephone interview with CNBC. “The Biden administration would be an asset for the stability of the environment, the stability of the relationship.”

Tensions between the United States and China have intensified under the Trump administration, which has taken a difficult approach to dealing with long-standing complaints of unfair trade practices in the Chinese state-dominated system. The two countries applied tariffs on billions of dollars in goods sourced from each other. The White House then blacklisted Chinese telecommunications giant Huawei and other companies that prevents them from purchasing parts from key U.S. suppliers.

Under a Biden administration, only 5.6% of respondents to the AmCham Shanghai survey expect more tariffs. Instead, 70.2% predict that the new US leadership will work more with other countries to put pressure on trade relations with China.

The AmCham Shanghai study was conducted with PwC and included 50 chamber members with global revenues of over $ 1 billion. The scale of the survey was smaller than the 346 respondents who took part in AmCham Shanghai’s annual business climate survey conducted from June 16 to July 16 this year.

China’s economic recovery from the coronavirus pandemic – when the United States still struggles to control the outbreak – is also helping businesses.

With just over a month to 2020, nearly half – or 47.6% – of respondents expect their 2020 revenue to exceed that of last year. That’s just under a third, or 32.5%, who had the same expectations in July.

The majority of companies with manufacturing operations in China intend to maintain production in the country over the next three years, with just three companies planning to move at least 30% of manufacturing overseas, according to the ‘investigation.

Covid-19 first appeared in the Chinese city of Wuhan late last year. The disease accelerated its spread around the Lunar New Year, forcing more than half of the country to close temporarily. As the epidemic stalled in the country at the end of the first quarter, the coronavirus had turned into a global pandemic hitting major economies in Europe and North America.

The heightened optimism is not clear to US business sentiment in China. One third of respondents are concerned about possible exit bans, detentions and other restrictions imposed on their employees.

The survey also found that only 13.7% of those polled intended to increase investment in China, with the majority remaining firm or undecided on their local development plans.

“Trade friction is not going to go away,” Gibbs said. “There are still structural issues that need to be resolved.”

In recent years, the Chinese government has released new policies to improve the foreign business environment. But critics say implementation is uneven and that forced technology transfer, lack of intellectual property protection and limited market access remain problems.