Foreign firms say China’s economic woes, geopolitical feuds won’t scare them off, but they’re investing less

Latest poll from American Chamber of Commerce in South China found that Chinese firms were much more keen on ramping up investments, but most US firms still plan to

However, there was a massive drop-off in reinvestment interest among firms from elsewhere, showing how market uncertainties and concerns in China persist

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An AmCham survey in the fourth quarter of last year found that 90 per cent of American firms were not planning to decouple from China amid geopolitical trade tensions. Photo: Bloomberg

Published: 4:00am, 27 Feb 2024Updated: 9:18am, 27 Feb 2024

Foreign firms are curbing their expansion plans in China amid what they expect will be an enduring economic slowdown and an escalation in US-China trade tensions, yet most of them are still opting to maintain their foothold in the vast market, according to the latest findings.

In a survey by the American Chamber of Commerce (AmCham) in South China, involving 183 respondents polled from October 9 to December 31, 49 per cent were from the US, 35 per cent were from China and the rest were from other regions, including Europe.

It said most were “optimistic about the growth of the Chinese market”, with 76 per cent planning to reinvest in China – a year-on-year rise of 1 percentage point.

Much of that optimism was driven by Chinese firms, with 89 per cent of them intending to ramp up investments, marking a 14-percentage-point annual increase. Among American firms, 63 per cent were looking to reinvest in China, down 5 percentage points.

And there was a massive drop-off among firms from elsewhere, with only 11 per cent planning in to reinvest in China – way down from 71 per cent a year prior.