US companies in China gloomier on bilateral tensions, COVID restrictions – survey

A kitchen worker pushes a shopping cart in Qianmen district, one of Beijing's most popular tourist destinations, as the novel coronavirus disease (COVID-19) continues to spread in China
A kitchen worker pushes a cart in Qianmen district, one of the most popular tourist spots in Beijing, amid the spread of the novel coronavirus disease (COVID-19) in China, April 8, 2020. REUTERS/Thomas Peter/Files

March 8, 2022

SHANGHAI (Reuters) – U.S.-based companies reported more pessimism about doing business in China amid bilateral tensions, ongoing COVID-19 restrictions, regulatory restrictions and a slowing economy, a survey by the American Chamber of Commerce showed on Tuesday.

Optimism about domestic market growth fell 11 percentage points year-on-year, according to the chamber’s report, which is based on responses from more than 300 member companies.

Businesses cited rising tensions between the US and China as the top business challenge, followed by conflicting or unclear laws.

Alan Beebe, president of the American Chamber of Commerce in China, said in a media session that there was a brief “bump” optimism among companies in China after Biden’s election in 2020.

“But what we’ve seen over the course of the last year is that a new reality has arrived where Trump administration politics and sentiment remain with the Biden administration,” Beebe added.

Companies also reported difficulties in hiring foreign and local talent.

Strict COVID-19 protocols in China make it difficult for foreign employees to work in China.

The policy has also hampered the hiring of locals.

“Many Chinese talents would rather not work for an American company. “Brand America” has started to depreciate due to tensions in the US [bilateral] relationship,” wrote an unnamed survey respondent.”

The slowdown in economic growth has also proved a challenge for both Beijing and US companies in China.

According to the poll released on Tuesday, 59% of respondents expect profits to increase in 2021 versus 2020. However, this number remains lower than before COVID.

Despite the bleak outlook and challenges, the survey found most companies planned to stay put, with two-thirds planning to increase investment in China in 2022.

(Reporting by Josh Horwitz) US companies in China gloomier on bilateral tensions, COVID restrictions – survey

Caroline Bleakley

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