China no longer a top 3 investment destination for most US firms amid mounting business challenges
- American Chamber of Commerce in China survey shows 45 per cent of firms ranked China as a top-three investment priority in their near-term investment plans
- This marks a significant shift from 60 per cent last year amid growing concerns over China’s policy uncertainties and bleak bilateral ties with the United States
Restoring positive business sentiment towards China cannot be done overnight despite an end to zero-Covid, according to the American Chamber of Commerce (AmCham) in China, as a survey showed for the first time US businesses are less willing to invest in the world’s No 2 economy.
AmCham in China said on Wednesday that for the first time in the 25-year history of its Business Climate Survey, China was no longer considered by most of its member companies as a top-three market, amid growing concerns about the country’s policy uncertainties and bleak bilateral ties.
AmCham president Michael Hart said there is “a lot of work to be done” to restore American business confidence in China, especially as a strong sense of corporate hesitancy persists.
“When headquarters think about investment, China is no longer at the top of the deck. That means investments are going to other places,” Hart said.
“We’ve been telling the Chinese government that ending Covid zero was very important, but bringing back sentiment is not as easy as swooping a switch.”
Most members report that they are revising their investment plans for China, opting to make no additional investment or even to decrease investment overall
Some 45 per cent of the 319 firms that responded to the survey, which was conducted between mid-October and mid-November last year, ranked China as a top-three investment priority in their near-term global investment plan, marking a significant shift from 60 per cent last year.
The proportion listing China as “one among many destinations” rose to 38 per cent from 29 in the previous survey.