79% of Chinese companies see US business situation deteriorating since last year, survey finds
A recent survey published by a Chinese business community in the United States presented a grim picture of Chinese companies operating in the United States, where companies are increasingly concerned about how to navigate unfamiliar waters amidst the deterioration of bilateral relations between the world’s two largest economies and the rise of anti-Chinese rhetoric.
As Washington ramps up efforts to crack down on Beijing, growing uncertainties have prompted some Chinese companies to consider scaling back and suspending investments in the United States, or even looking to other markets as a result – a decoupling trend that , according to industry watchers, could weigh on the US economy. and gradually weaken the competitiveness of US companies.
About 29% of Chinese companies consider the investment and business environment in the United States to have deteriorated significantly in 2021, and a significant majority of 79% of respondents see the business situation in the United States deteriorating since. last year’s investigation, according to an investigation by the Chinese General Chamber of Commerce. – USA (CGCCUSA) sent to Global Times on Friday.
The survey is titled Annual Survey of Chinese Companies in the United States, which reflects the American business environment and the challenges faced when Chinese companies operate in the United States.
Concern over the complexity of Sino-US relations, which topped the list of difficulties in recent years under the former Trump administration, shows no sign of a turning point under the Biden administration which calls China a “strategic competitor “. According to the survey, most companies have conservative views on the outlook for China-U.S. Relations, with 65 percent citing the fraying of the relationship as one of the main obstacles to their future investment plan in the United States.
As part of ongoing efforts to restrain China’s rise to power, the U.S. House of Representatives Committee on Foreign Affairs has scheduled a meeting next Wednesday to consider sweeping legislation to boost economic competitiveness and push Beijing on human rights, the Strait Times reported Thursday.
What is remarkable about the survey is that 18% of Chinese companies reported that cultural conflicts, including anti-Asia / China sentiments and styles of operations management, continue to be one of their main concerns in 2021. In 2019, before the United States put forward the problem of the origin of the coronavirus, the ratio stood at 28 percent.
In addition, the tariff war continues to weigh on the functioning of Chinese companies in the United States this year, inflating their costs of importing finished goods and upstream sourcing. The survey showed that in 2021, some 59% of those polled said they had been negatively affected by the current tariffs, up from 73% in 2020.
While some investors remain indifferent to trade relations, they have taken note of the Committee on Foreign Investment in the United States (CFIUS) which filters foreign investment, criticizing organizations as “politicized and opaque.”
Taken together, these difficulties lead to an atmosphere that would further discourage Chinese investment, and analysts have said that in the long run, the trend will drive up inflation in the United States and make American consumers suffer from higher spending on them. daily necessities.
The survey showed that 16% of those polled said they plan to reduce their investments in the United States this year, a slight increase from the 7% recorded in 2020.
China United States Photo: GT
In light of the trade disruptions that threaten supply chain management last year, 30% of respondents affected by declining trade relations said they would delay or cancel future investments in the United States, and 44% intend to increase investments in other regions, including Asia, Europe and South America, according to the 2020 activity report published by CGCCUSA.
Beijing Economic Operation Association vice director Tian Yun told the Global Times on Friday that the decoupling streak is likely to accelerate in the high-tech sector, as the Biden administration redoubles its efforts to build a high-tech supply chain “”.
“Washington could mobilize more political power to oust Chinese high-tech companies from the US market. In addition, technology cooperation with US companies could face more obstacles than ever before,” Tian said, while suggesting that Chinese companies step up their diversification efforts.
Some analysts have said that the hostile political environment in the United States will eventually make Chinese companies strong in the international sphere, as they will cut spending, control costs and improve their competitiveness to cope with difficulties. While on the American side, local businesses are well protected at home and may gradually lose their competitive edge.