A majority of U.S. companies operating in China are optimistic about profits and are investing more to benefit from China’s anticipated future growth, according to a new survey by the American Chamber of Commerce in Shanghai and consultancy PwC. Of all the surveyed companies, 82.2% said they projected revenue growth in 2021, a return to the levels of confidence last seen before the height of U.S.-China trade tensions. Of the 338 companies participating in the annual survey, which is in its 23rd year, nearly 80% described themselves as either “optimistic” or “slightly optimistic” about the five-year business outlook in China, a return to the figures found between 2015 and 2018. “The sheer size, consumer base and opportunities present in this market are gravitating companies into China,” said Jeff Yuan, a lead partner for the China-U.S. Multinational Corporation Business Services Group at PwC China. China remained a stable source of profitability, with 77.1% of survey respondents reporting positive earnings last year. Nearly 70% expected revenue growth in China to outpace their companies’ worldwide growth for the next three to five years. Speculations that some U.S. companies might move production or supply chains out of China in the aftermath of the Covid-19 pandemic have proved unfounded: of the 125 respondents that said they manufacture in China, 72% had no plans to move any production out of China in the next three years.
“American businesses in China bounced back quickly from the 2020 Covid-19-induced shutdown,” said Jeffrey Lehman, Chairman of AmCham Shanghai. The fact that many Chinese companies have localized supply chains is alleviating the negative impacts of bilateral tariff disputes and the Covid-19 pandemic, he added. Yuan, of PwC, said, “Having a China strategy is still a priority for many of the U.S. companies in China that are optimistic about the future in China.” AmCham Chairman Lehman said U.S. companies, notably those in the agriculture, finance and chemical sectors, are finding that the intellectual property and regulatory environment is “significantly improving”. Other highlights of the survey findings include a priority on investing in digital technology-related areas and a doubling down on projects with an emphasis on environmental, social and corporate governance factors, the China Daily reports.