China drops in priority for US companies due to rocky relations, survey says

China fell slightly in strategic priority for American companies over the past year as deteriorating relations between the countries continued to weigh heavily on executives, according to the annual US-China Business Council (USCBC) member survey released on Thursday.

While China remained among top priorities for US companies, it has become a little less important. As many as 74 per cent of the company executives surveyed considered China as the top priority, or among the top five; that number was as high as 94 per cent a decade ago.

Executives said the dip in priority was the result of the worsening bilateral tensions that remained the top concern for the fourth year for their businesses. The rocky relationship has resulted in reputation damage to US firms, lost sales, shifts in suppliers and increased scrutiny from regulators in both the United States and China.

“There have been considerable changes” for American companies in the US in the past year, said Craig Allen, president at the USCBC, which represents more than 200 US companies, at a virtual event about survey on Thursday. “There’s a significant increase in tension, and yes there are concerns about factors that we cannot control.”

Allen urged the US and China “get back to the negotiation table” to talk about trade issues such as market access that goes beyond the phase one deal.