Caixin
Nov 20, 2020 07:49 PM
BUSINESS & TECH

U.S. Executives in China Looking Forward to Biden Administration

Joe Biden speaks during an online press conference in the U.S. on Thursday.
Joe Biden speaks during an online press conference in the U.S. on Thursday.

American companies in China broadly favor the prospects of a Joe Biden administration and expect more stable U.S.-China relations in the coming years, according to a new survey conducted to measure business sentiment following the U.S. election.

The survey, released Friday by the American Chamber of Commerce in Shanghai, also found that a large majority of executives from 124 companies believed the Biden administration would exert multilateral pressure on China and demand reciprocity in bilateral trade and investment relations.

Asked about their investment or de-risking plans under a Biden administration, 53.2% of companies said they did not expect changes in their plans, 13.7% said they would increase investment, and just 5.6% said they would “commence, continue, or consider a China de-risking strategy.”

Ker Gibbs, president of the American Chamber of Commerce in Shanghai, said that the results showed “businesses are signaling that a Biden administration will bring more stability to the US-China relationship. This will be welcome after several years in which American companies have had to deal with uncertainty and sometimes erratic policies.”

Compared with respondents’ sentiment in a similar July survey, companies were more optimistic about their expected 2020 revenues, with 47.6% of respondents expecting year-on-year revenue growth.

“The good news is that China’s economic recovery means American businesses are doing better than they imagined just four months ago, thanks to China’s strong economic recovery,” Gibbs said.

82% of companies with manufacturing operations in China had no plans to move their manufacturing offshore in the next three years. Just two companies anticipated offshoring more than 30% of production, and only one reported plans to move production out of China entirely.

However, 29.8% of respondents believed the U.S.-China trade tensions would continue indefinitely, while 28.2% thought trade tensions would thaw within a year.

The results came after the Chinese foreign ministry on Nov. 13 congratulated former U.S. Vice President Joe Biden for being favored by American voters in the U.S. president election. Defeated incumbent President Donald Trump has not yet conceded, filing lawsuits in some battleground states to challenge the results.

Contact editor Gavin Cross (gavincross@caixin.com)

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