Skip to content

Optimism of U.S. Companies in China is Declining

The American Chamber of Commerce in China (AmCham China) recently published its 24th annual edition of the China Business Climate Survey (BCS) Report.

According to the 2022 BCS Report, In 2021, US companies in China reported a declining level of optimism due to multiple challenges. These included sustained air travel disruptions, an increasingly uncertain regulatory environment, difficulty attracting and retaining talent, and the strained US-China relationship.

US companies operating in China faced mounting pressure and risks  on politically sensitive issues as well. One example is navigating US-China bilateral tensions, which remains a top challenge and concern for companies. 42 percent of companies have been facing mounting pressure to speak out and make (or not make) statements on politically sensitive issues. This has often caused them problems in both the U.S. and Chinese markets.

More than twice as many companies feel “much less welcome” in China compared to last year. One-third of respondents report that foreign companies are treated unfairly versus domestic competitors.

Most believe labor costs will increase in 2022, in line with fears that labor costs and wages are a growing HR challenge.

47 percent of the over 300 respondents report they are confident or very confident that the Chinese market will open up more to foreign investment over the next three years. This figure is down 14 percentage points from last year.

Optimism is down across almost all aspects of business operations in China and pessimism up more than 10 percentage points with regard to the regulatory environment and economic growth. 37 percent of members see China’s investment environment improving, a 13 percentage point decrease from last year and the lowest in four years. Concerns about an uncertain Chinese policy environment is the most-cited reason for declining investment.

Source: AmCham China, March 2022.