SHANGHAI- Geopolitics and a slowing economy are fueling pessimism among US businesses operating in China, with the proportion of firms optimistic about their five-year outlook in the country falling to a record low, a survey released on Tuesday said.
Even after the ending of COVID curbs, which weighed heavily on both revenues and sentiment in 2022, the percentage of surveyed US firms optimistic about the five-year China business outlook fell to 52 percent , according to the annual survey published by American Chamber of Commerce (AmCham) in Shanghai.
This was the lowest level of optimism reported since the AmCham Shanghai Annual China Business Report was first introduced in 1999.
“Frankly, if there was one thing that surprised me about the survey this year it was that number,” said AmCham Shanghai Chairman, Sean Stein. “By the time we did this year’s survey a lot of the illusions had fallen away that we would see a sustained rebound in economic growth (post-COVID).”
Geopolitics remained a major concern for many firms, with US -China tensions cited as a top business challenge by 60 percent of the survey’s 325 respondents, equal to the number who pointed to China’s economic slowdown as a top challenge.
Concern over the transparency of China’s regulatory environment also grew, with one third reporting that policies and regulations towards foreign companies had worsened in the past year, though many respondents pointed to US government policy rather than China’s when asked about pressure to decouple.
Companies have been at the center of deteriorating relations between the two countries for several years. China has criticized US efforts to block China’s access to advanced technology and US firms have expressed concern about fines, raids and other actions that make doing business in China risky.
