Coronavirus: most US firms in China still struggling with travel disruptions as pandemic fallout continues

Some 37 per cent of US firms will reduce their planned investments in China in light of the coronavirus pandemic, AmCham survey shows

Global travel disruptions caused by the coronavirus were still affecting 90 per cent of US firms in May, up from 77 per cent last month

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Relations between China and the US have hit new lows in recent months, as the two nations clash over trade, the coronavirus and Beijing’s new security regulations for Hong Kong. Photo: AFP

Published: 7:20pm, 29 May 2020Updated: 10:10am, 3 Jun 2020

More than a third of US companies operating in China plan on scaling back investment in the world’s second largest economy in light of the coronavirus pandemic, while nine in 10 are still facing travel disruptions six months after the virus was identified in the city of Wuhan, a survey showed on Friday.

However, rising tensions between the US and China had not caused “a direct negative” effect on American firms, according to the American Chamber of Commerce (AmCham) in China.

Some 37 per cent of businesses said in May they would reduce their planned investments in China, down three percentage points from last month but up from 24 per cent in March, said the AmCham survey of 109 mostly multinational companies.

About 47 per cent said they may adjust long-term business plans, 11 percentage points higher than in April, while 60 per cent of firms said they had been forced to cut costs, up from 50 per cent last month, the survey said.

So many companies are adopting what we refer to as a China+1 strategy whereby they’ll invest in China to tap into the market opportunities, but at the same time diversify their supply chains

Alan Beebe

“So many companies are adopting what we refer to as a China+1 strategy whereby they’ll invest in China to tap into the market opportunities, but at the same time diversify their supply chains and therefore risk to other parts of the world,” said AmCham China president Alan Beebe.