FOR IMMEDIATE RELEASE
WASHINGTON, August 11, 2020 - Despite an unprecedented downturn in US-China relations during a pandemic, US businesses are not leaving the China market. This was a major finding of an annual survey of members released today by the US-China Business Council (USCBC), a trade group representing more than 200 businesses, many of them global brands with decades of China experience.
Projections about the five-year business outlook in China at first seem bullish, with nearly 70 percent expressing optimism about the commercial prospects of the market, and 87 percent of companies reporting that they have no plans to shift production out of China. But those numbers belie a trend of progressively diminishing optimism in the short- to medium-term prospects of the China market.
One quarter of USCBC member companies have reduced or stopped planned investment in China in the last year. The top reasons were increased costs or uncertainties from US-China tensions and uncertainty stemming from COVID-19. Competition, intellectual property rights enforcement, and data flows also ranked among the top challenges that companies face in the China market.
“US-China trade and investment supports about 2.6 million American jobs,” noted USCBC President Craig Allen. “We need to sustain and grow those jobs in future years, while finding ways to reduce conflict in other areas of the relationship.”
Full implementation of the Phase One trade agreement is one way to restore confidence—88 percent of respondents have a positive or somewhat positive view of the agreement, namely because it put a lid on escalating tariffs and added an element of stability to the bilateral relationship.
Still, a 56-percent majority believe it is too soon to say whether the benefits of the trade agreement outweigh the costs of tariffs or vice versa.
“Companies are now seeing the fruits of the agreement, particularly the market openings,” said Allen. “Phase One must be a success if we are to deepen trade negotiations and work toward a Phase Two. As our survey shows us, there is more work to be done.”