Pessimism Rises Among American Companies in China
What’s new: More than 70% of U.S. companies operating in China currently don’t plan to move factories out of the country, though fewer companies plan to increase investment in China amid the Covid-19 pandemic and the deterioration of China-U.S. relations, a survey showed.
Although the two countries signed a first phase trade agreement, U.S. companies’ optimism about the prospects for bilateral economic and trade relations has cooled compared with last year, according to the survey released Wednesday by the American Chamber of Commerce in Shanghai.
An ongoing debate about “decoupling” the world’s two biggest economies has also caused confusion for businesses, the survey found. Nearly 27% of companies in the survey said they think current economic and trade tensions will "continue indefinitely," up from 16.9% last year. Those most pessimistic include companies in hardware technology, software, technology services, pharmaceuticals, medical devices and life sciences.
The background: The survey was conducted between June 16 and July 16 among 346 members of the Shanghai chamber. Among them, more than 200 companies have factories in China or outsource production to China. Since the survey, tensions between the two countries have escalated.
U.S. President Donald Trump is pressuring Chinese company ByteDance Ltd. to divest its popular TikTok short video app or face a ban in the U.S. WeChat, another popular social media platform run by Chinese Internet giant Tencent, also faces an imminent ban.
American companies operating in China fear the WeChat ban will blunt their competitive edge and hurt their revenues, a separate survey by the business group showed.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.
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