SHANGHAI, Oct 28 (Reuters) – Optimism among U.S. businesses in China is at an all-time low, an annual survey showed on Friday, as competitive, economic and regulatory challenges add to worries imposed by Beijing’s ongoing zero-covid policies.
In Shanghai, the American Chamber of Commerce and consultancy PwC China said that only 55% of 307 companies expressed themselves as optimistic about the five-year business outlook. The reading is the lowest in the study’s 23-year history and worse than in 2020, when COVID-19 first appeared, and in 2019 during the trade conflict between Beijing and Washington.
In addition, nearly half of companies said their headquarters’ trust in China’s economic management had declined in the past year, and only 18 percent said China was at the top of their company’s global investment plans, down from 27 percent last year.
Respondents surveyed between July 14 and August 18 cited domestic competition as their top challenge for the next five years, followed by US-China tensions, an economic slowdown and Covid-related travel restrictions and shutdowns.
“What’s keeping many businesses up at night is increasing competition from Chinese competitors,” Sean Stein, chairman of the council, told a news conference.
He added that in the past, the main competitors may have been state-backed Chinese rivals, but private digital players dominated the domestic market.
In particular, with tensions rising with the United States over China’s policy on Taiwan, its relationship with Russia, and more recently America’s efforts to prevent the transfer of semiconductor technology to Chinese companies, Beijing has urged its key industries to be self-sufficient.
In addition, while many countries have eased coronavirus restrictions, China has continued to fight its spread with lockdowns, mass testing and isolation, which has hit economic growth and caused major disruptions to businesses.
Steen said the relaxation of Covid policies would add “absolute” optimism, as travel restrictions that help overseas executives to physically manage projects “continued” but warned that sentiment alone could not return to past high levels.
Still, the survey found that only 53 firms, or 17 percent, were planning to leave in the next one to three years, as the market’s sheer size, skilled talent pool and strong supply chain led most businesses to outsource to China. Tests.
Reporting by Josh Horwitz Editing by Thomas Janowski
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