Battered Chinese companies put American plans on hold as trade war rattles confidence in US
- Survey mirrors downbeat sentiment of American businesses operating in China
- While optimism is scarce, US think tank warns that trade war focus is skewed
Batten down the hatches is the central message from Chinese companies operating in the US, buffeted by increasing regulatory restrictions from both governments and a tightening labour market.
Investment by Chinese companies in the United States has fallen by nearly 90 per cent since its peak in 2016, including a sharp drop in 2018 and early 2019, with more companies reporting lower revenues and thinner profit margins than a year ago.
Half of the respondents in the survey – conducted in February and March – felt the investment and business environment had deteriorated in 2018, more than double the 23 per cent that saw it that way last year. With investment decisions lagging broader shifts in US-China relations, the report’s relatively downbeat findings likely understated the mood given the bad news since members were surveyed a few months ago.
In a mirror image, the most recent American Chamber of Commerce in China survey of US companies operating on the mainland, released in February, was similarly downbeat, referring to relations as a “ticking time bomb”.
On Monday, US President Donald Trump renewed his threat to put tariffs on another US$300 billion of Chinese goods in a CNBC interview, the latest salvo of the tit-for-tat trade war. Investment and security-related regulations are tightening on both sides of the Pacific.