Chinese and American flags flutter near the Bund, before the American trade delegation meet their Chinese counterparts for conversations in Shanghai, China on July 30, 2019.
Aly Song | Reuters
BEIJING – A record share of American companies in China accelerates their plans to move production or purchasing, according to a Thursday survey by the business community.
About 30% of the respondents considered or started with such a diversification in 2024, so that the earlier high of 24% was surpassed in 2022, according to annual surveys from the American Chamber of Commerce in China.
That also exceeded the 23% share reported for 2017, when US President Donald Trump started his first term and began to increase rates on Chinese goods.
In addition to the tensions of the US-China, “one of the most important effects we have seen in the past five years, Covid and how China closed off the world because of Covid,” Michael Hart, in Beijing, President of Amcham China, Reporters told Thursday.
“That has been one of the greatest triggers, because people realized that they had to diversify their supply chains,” he said. “I don’t see that trend slowing down.”
China limited international journeys and locked parts of the country during the COVID-19 Pandemie in an attempt to limit the spread of the disease.
While India and Southeast -Asian countries remained the most popular destination for moving production, the survey showed that 18% of the respondents considered moving to the US in 2024, an increase of 16% the previous year.
The majority of American companies did not intend to diversify. A little more than two -thirds, or 67%of the respondents, said they were not considering moving production, a decrease of 10 percentage points from 2023, according to the survey.
The last Amcham China survey included 368 members from October 21 to November 15. Trump was re -elected by the American president on November 5.
This week Trump confirmed plans to increase rates on Chinese goods by 10%, and said that the tasks could come as quickly as possible. The BIDEN administration had emphasized the US in competition with China and has given radical limitations to the ability of Chinese companies to gain access to high-quality American technology.
More than 60% of the respondents said that the tensions of the US china were the biggest challenge for doing business in China in the coming year. Competition from local state -owned companies or private Chinese companies, according to the survey, was the second biggest challenge for American companies that are active in China.
Slower economic growth
As an addition to geopolitical pressure, the growth in the second largest economy in the world has been delayed, with muted consumer spending since the pandemic. At the end of September, the Chinese authorities started the efforts to stimulate growth and to stop the malaise of real estate.
During a third year, more than half of the respondents of Amcham China said that they did not make a profit in the country, adding that the region had become less competitive in terms of margins versus other world markets.
The proportion of companies that no longer list China as a preferred investment destination climbed to 21%, doubled from pre-Pandemic level, according to the survey.
Looking ahead, however, said that tech, industrial and consumer companies said they considered the growth of domestic consumption as the best business opportunity for 2025, according to the survey. Service companies said that their great -opportunity were Chinese companies that wanted to expand abroad.
Hart noted that many members are still optimistic of Chinese consumers as a “significant, important market”.