The past year has been one of victories, pitfalls, and surprises in US-China relations. Several of the most defining moments took place in the trade sphere, having a profound impact on US companies that do business in China. Since the US-China Business Council (USCBC) released our last member survey, the United States and China finalized a Phase One trade agreement, putting tariff escalations of the past two years to a halt. While China began making structural reforms to implement its Phase One commitments and both countries entered what would have been a conciliatory period, a novel pathogen began wreaking havoc on public health and the global economy, reigniting discord in the US-China trade relationship just as the United States heads into an election year.
These tumultuous circumstances, and particularly the COVID-19 pandemic, have bred uncertainty into the business environment, clouding companies’ perspectives on the short-term business outlook for China. Companies also remain concerned about long-held operational issues like fair competition, data and cybersecurity policy, and intellectual property protection. Despite high tensions, all indicators suggest that companies remain largely committed to the China market over the long term.
Unlike last year, uneven enforcement and human resources did not make it into this year's ranking of the top 10 challenges faced by member companies. Instead, COVID-19 and tariffs made their way onto the list, and prominently. This report delves into some of these challenges and other common themes appearing in our survey data this year.