Political Tensions Weigh Heavy on US Companies in China Despite Strong Performance


Contact in Washington, DC:
Doug Barry ([email protected]; 202-429-0340)
Contact in Beijing:
Matt Margulies ([email protected]; 86-10-6512-5854)
WASHINGTON—August 5, 2021—In the face of a pandemic and persistent trade tensions over the last year, US companies in China reported strong profits and growth prospects in one of the largest and fastest growing markets. This is according to the 2021 Member Survey of the US-China Business Council (USCBC), a trade group representing more than 250 companies, including many of the United States’ most iconic brands.

Nevertheless, companies say their top challenge is the rocky relationship between Washington and Beijing, for the fourth consecutive year. Trade tensions have resulted in reputational damage to US firms, lost sales, shifts in suppliers, and heightened scrutiny from regulators in both the United States and China. 

“Many companies feel like they are operating in a minefield,” said Craig Allen, USCBC president. “Candid engagement between the two countries is a good start to re-establishing stability, but we need more of it.”

Companies report that it continues to become more challenging to do business in China. Competition with Chinese companies is intensifying as the market matures, while new rules around issues like data flows and personal information make the playing field increasingly uneven for foreign companies. Tariffs continue to pose a major challenge, and pandemic-related travel restrictions exacerbate political tensions and operational challenges. 

This has not stopped US companies from investing more in China for the time being, though. More than 40 percent of companies surveyed are accelerating their resource commitment for the next year; only six percent are curtailing investment. However, China is ranking as a lower priority in company planning over time, the survey shows.

“Other markets may become more attractive over the long term as countries focus on supply chain resilience and pro-business reforms in China continue to slow,” said Allen. 

“In the short term, getting back to the table to build on reform progress from the Phase One agreement; removing the tariffs, which harm US interests; and easing restrictions on travel between the United States and China can help get the trade relationship on track.” 

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“许多企业对它们的运营感到举步维艰,” 美中贸易全国委员会主席克雷格·艾伦谈到:“两国之间坦诚相待是重新建立起稳定关系的良好开端,我们需要更多这样的接触。”