Update | Foreign firms less confident in China’s economy: American Chamber poll
More overseas businesses are cutting back investments, with some planning to move production elsewhere, American Chamber survey shows; almost half of all firms polled expect GDP growth this year to be less than 6.25pc
Weaknesses in China’s economy have weighed on foreign firms, many of whom now plan to relocate their firms and reduce their investments in the country, according to a business climate survey.
The survey, released on Wednesday by the American Chamber of Commerce in China, showed that nearly one-third of some 500 member firms polled had no plans to expand investment in the country this year.
The proportion was “a higher percentage than during the financial crisis in 2009”, it said. Other firms would expand investment this year, but at a slower pace than in previous years.
READ MORE: China turns in lowest growth rate in 25 years at 6.9pc as Hong Kong, Shanghai markets rally amid hope of policies to stem slowdown
Market players and observers are becoming increasingly pessimistic as official data revealed on Tuesday that China’s economic growth had slowed to a 25-year low of 6.9 per cent in 2015.
The AmCham poll showed that 64 per cent of member firms still saw doing business in China as profitable – a five-year low.
Nearly half of member firms in the industrial and resources sectors reported falls in revenues.
About half of those polled expected the country’s gross domestic product to expand by less than 6.25 per cent in 2016 – much lower than the People’s Bank of China’s forecast of 6.8 per cent.
China’s gloomy economic outlook or better prospects in other countries were the main reasons companies were making plans to cut investment in the country, the survey found.