U.S. companies remain committed to the Chinese market despite diplomatic tensions, with 83% of the firms surveyed not considering relocating manufacturing or sourcing outside of China, according to an annual white paper released by the American Chamber of Commerce in China (AmCham China). AmCham called for both governments to adhere to globally accepted trading rules, support the existing multilateral trade regime, and avoid protectionist practices, as the years-long China-U.S. tariffs war continues to affect the two countries' business communities. About 58% of the U.S. companies surveyed report being directly affected by the China-U.S. relationship. About 42% of the U.S. companies surveyed reported China's growth in domestic consumption and the rise of its growing, affluent middle class as a top business opportunity. The country's decision to build a unified national market characterized by a market-oriented, international business environment ruled by laws would bring more benefits for U.S. companies, Li Yong, Deputy Chairman of the Expert Committee of the China Association of International Trade, a think tank affiliated with the Chinese Ministry of Commerce (MOFCOM), told the Global Times.
Despite challenges brought by Covid-19 resurgences and global uncertainties, China's actual use of foreign capital jumped 26.1% year-on-year to USD74.47 billion in the first four months of 2022, while investment from the U.S. surged 53.2% year-on-year. The National Development and Reform Commission (NDRC) said that the country is amending its catalogue of encouraging foreign investment to push for a volume increase and structural improvement. In particular, China encourages inbound foreign investment to flow into key sectors like manufacturing and producer services, and to key areas including the central and western regions and Northeast China, it said.
However, AmCham China said that U.S. companies continue to face challenges in the Chinese market due to rising tensions in China-U.S. relations and issues in China's market conditions. The report contained complaints about a level playing field for U.S. companies, including “discriminatory economic policies and insufficient intellectual property protection”. But Bai Ming, Deputy Director of the International Market Research Institute at the Chinese Academy of International Trade and Economic Cooperation, said China's business climate was constantly improving. “Some politicians and businesses in the U.S. are hyping hostility toward China by exaggerating slight concerns so as to pressure U.S. companies to withdraw from China," Bai told the Global Times, noting that it's not only an economic problem.
While U.S. President Joe Biden is under mounting inflation pressure to remove additional tariffs on imported Chinese goods, the U.S. is moving to worsen bilateral relations by threatening to delist dozens of Chinese companies. Qin Gang, China's Ambassador to the U.S., recently noted that since former U.S. president Donald Trump launched a trade war against China, the tariffs have cost U.S. corporations more than USD1.7 trillion and increased American households' spending by USD1,300 each year. During the same period, the tariffs also caused the loss of over 240,000 jobs in the U.S. “We remain opposed to any effort at outright decoupling of the U.S.-China relationship. The costs of decoupling from losing trade and foreign investment benefits for both countries would be significant and are unlikely to generate clear winners,” the report says, as reported by the Global Times.
Regarding its priority for 2022, AmCham China said it will encourage action-based engagement between the U.S. and China to create substantive and mutually beneficial initiatives and solutions on an issue-by-issue basis, and it will support both sides to enrich cooperation and exchanges in areas of global and bilateral importance. The white paper revealed that 58% of AmCham members have already lowered revenue projections for 2022 in China and 61% have experienced supply chain disruptions due to transportation and shipping issues, the China Daily adds.
