US companies in China see a dark year


BEIJING: US companies in China are planning a gloomy year, much worried about the deterioration of bilateral trade relations and nearly a quarter delaying their investments, revealed a survey conducted by companies this Tuesday, Feb. 26. .

The US Chamber of Commerce's survey of 314 US companies provided a comprehensive description of the challenges American companies face after Beijing and Washington exchanged customs duties worth more than $ 300 billion. US dollars in bilateral trade.

The report was released two days after US President Donald Trump announced that he would delay further tariff increases on Chinese products this week, after he and Beijing welcomed "substantial progress" in trade negotiations.

The survey found that 89% of companies expressed a pessimistic view of the world's largest bilateral trade relationship.

The tariffs have directly affected US companies, increasing costs and reducing demand from Chinese consumers, as some companies even have to fire workers, the survey found.

Trade between the United States and China was one of the main concerns of businesses in all sectors. Three-quarters expect the relationship to deteriorate further or remain the same this year.

Nearly two-thirds of those surveyed said the tensions had affected their market plans and delayed nearly a quarter of investments in China, the survey revealed.

Trade tensions have increased inspections, slowed customs clearance and strengthened regulatory oversight for many companies, the chamber said.

About a fifth of the companies have moved or are planning to relocate their production outside of China, mainly because of tariffs and rising costs, according to the survey.

Market access – a long-standing concern for US, European and other foreign companies and at the top of the Trump administration's blame list – remains a problem for about three-quarters of companies.

"China has made our kind of activity, which partly involves the import of agricultural products into China, harder every year since I arrived in China," said an unnamed official.

Another issue being discussed between the two largest economic powers in the world is the protection of US intellectual property, with Washington accusing Beijing of encouraging theft of American creations.

One-third of companies said it pushed them to limit their investments in China, to about half in the technology, resources and industry sectors.

Nevertheless, 59% of companies said that IP protection has improved over the past five years.

"Yes, there are challenges ahead – many longstanding commitments and many past commitments," said Timothy Stratford, chairman of the chamber, in the report.

"China remains an extremely important market for many US companies and the bilateral economic relationship is too important not to succeed."

The slowdown in growth is also a major concern after the Chinese economy has recorded its weakest expansion in nearly three decades in 2018.

More than half of the companies expect market growth of 5% or less this year, less than the growth target of about 6% that Beijing is expected to announce next month.

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