19 Sep 2023
An economic slowdown and geopolitics are driving cynicism among US businesses in China, with the number of companies optimistic about their five-year outlook in the country dropping to an all-time low.
The findings of a survey published on Tuesday by the American Chamber of Commerce (AmCham) in Shanghai showed that just 52% of US firms are buoyant about their China business outlook over the coming five years.
This was the lowest optimism level reported since the AmCham Shanghai Annual China Business Report was initially introduced back in 1999, Reuters reports.
This marks the lowest level of optimism recorded since the inception of the AmCham Shanghai Annual China Business Report in 1999, according to Reuters.
"Frankly, if there was one thing that surprised me about the survey this year, it was that number. By the time we did this year's survey, a lot of the illusions had fallen away that we would see a sustained rebound in economic growth (post-COVID)," said AmCham Shanghai Chairman Sean Stein.
Geopolitics remained a principal worry for many businesses, with US-China relations named as a main challenge by 60% of the 325 companies taking part in the survey. This matched the number who said China's economic slowdown was also a main challenge.
In addition, concern over China's regulatory environment also increased, with a third of firms stating regulations and policies towards foreign businesses had deteriorated over the last year.
US Commerce Secretary Gina Raimondo said during a visit to China in August that US firms have filed complaints that China has become "uninvestible," the Reuters report adds.
Furthermore, the AmCham report also cited geopolitical tensions as the main risk to China's future economic growth. Improved US-China relations would be the main factor that the survey's respondents said would boost their outlook in China.
Additionally, 40% of businesses – a rise from 34% in 2022 – are currently looking to redirect investment that had been allocated for China, mainly to Southeast Asia.