Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to a survey of its member companies by the U.S.-China Business Council, rising bilateral tensions are affecting every aspect of U.S. companies’ operations in China. This includes hurt sales, lower profits, and canceled or delayed investments.
In this latest annual survey, the proportion of companies expressing pessimism about the prospects of their business in China over the next five years rose to 28 percent from 21 percent last year, setting a new record high. The share of companies with an optimistic outlook dropped to a record low of 49 percent. More than one-third of the companies surveyed said they had reduced or suspended investment plans in China during the past year, also a record high and well above the 22 percent in last year’s survey. This means the businesses’ commercial presence in China will likely see further decline.
These businesses’ decisions are driven by the increased costs and uncertainty of doing business in China, as well as by increased restrictions on selling products into the Chinese market. Particularly unsettling for U.S. companies are China’s far-reaching rules on data handling, personal information, and cybersecurity. Some 97 percent of the companies surveyed expressed concern over these issues.
The U.S.-China Business Council said that most of the companies involved in the survey are large U.S. multinationals that have been operating in China for decades.
Source: Lianhe Zaobao, September 27, 2023