US-China relations: investment environment improving for American firms, AmCham survey shows

Only 12 per cent of the 345 US firms surveyed by the American Chamber of Commerce in China said the investment environment was deteriorating

This represented the lowest proportion since the question was first introduced in the 2012 survey

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Overall, 83 per cent of respondents said they would maintain their existing manufacturing and sourcing in China in 2021, the same level as last year’s survey, with a mere 2 per cent saying they were considering reshoring their production or operations back to the US. Photo: Bloomberg

Published: 6:26pm, 9 Mar 2021Updated: 6:26pm, 9 Mar 2021

In a sign that China’s efforts to attract foreign investors and businesses is gaining traction, half of the American companies operating in China said the investment environment was improving, according to a survey released on Tuesday.

Only 12 per cent of the 345 US firms surveyed by the American Chamber of Commerce in China said the investment environment was deteriorating, the lowest proportion since the question was first introduced in 2012.

More than one-third of companies also said they would cut or leave their investment in China unchanged, and another 37 per cent said they would increase investment by up to 10 per cent, the survey showed.

“Here we do see a little bit of a dichotomy in the sense that the strong optimism doesn’t necessarily translate into strong investment plans,” said AmCham China president Alan Beebe.

“While the optimism is running high in terms of market growth prospects, in terms of China’s economic recovery, in terms of the investment environment, this is translated into a bit more of a tempered approach as far as some individual companies’ investment plans.”

The service sector is projected to receive the biggest jump in investment, with 40 per cent of firms set to increase investment by no more than 10 per cent, compared to 27 per cent last year.

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