US business optimism in China tumbles to an all-time low, with zero-Covid and geopolitical tension top concerns
- Coronavirus control measures, US-China relations and Beijing’s data and cybersecurity rules are top concerns
- Impacts on consumer demand said to ‘undermine’ confidence in overall business environment in China
US companies’ optimism about business conditions in China is at a record low level, even though 89 per cent say their operations in the country are profitable, a new annual survey shows.
The US-China Business Council’s annual survey also found Covid-19 control measures to be the biggest challenge American businesses faced when operating in the country last year. Of the 117 respondents, 96 per cent said they saw negative effects on their businesses, including halted investment, lost profit and disrupted supply chains.
“The looming possibility that companies will again be forced to partially or fully halt operations due to lockdowns and the impacts of local controls on consumer demand undermine business confidence in the overall business environment in China,” said USCBC President Craig Allen during Monday’s launch of the survey results.
Allen also voiced scepticism that China’s 1 trillion yuan (US$146 billion) stimulus package introduced last week and focused on infrastructure could prop up the country’s economy.
“There is concern about consumer sentiment in China, particularly associated with the zero-Covid policies,” he said. “The Chinese consumer is saving more and spending less … until Chinese consumer sentiment picks up, I think that we’re going to remain somewhat sceptical.”