Chinese and US flags flutter near the federal government before the US trade delegation meet its Chinese colleagues for talks in Shanghai, China, July 30, 2019.
Aly song | Reuters
Beijing – Almost half of the US companies have diverted China investments to other regions last year – the American Chamber of Commerce in Shanghai, on Wednesday – the highest.
The survey of the Chamber of Commerce among the members came shortly after an escalation of the US China trade voltages and a temporary rollback from some tariffs from mid-May. The two countries agreed last month to extend the commercial armistice by another 90 days to mid -November.
“For a company, 90 days, that's just too short,” said Eric Zheng, President of Amcham Shanghai, reporters and pointed out that planning the supply chain is well over long -term.
“At least we don't have to deal with even higher tariffs [for now]But the problem doesn't go away, it is still here, “said Zheng.
Up to 47% of those surveyed in the survey, which were carried out from May 19 to June 20, stated that they had mainly deflected investments for China to Southeast Asia. This is the highest proportion since the survey, which for the first time contained the question of postponing the China investments in 2017.
The Indian subcontinent, which includes Bangladesh, was the second most frequent goal for re -laid investments, while the USA and Mexico were tied to the third position.
US President Donald Trump has tried to encourage companies to bring the production back to America, with Trump criticizing Apple'S plans to expand production in India. Some companies, especially in progressive technology, have made top -class announcements to invest in the USA
Apple is one of the members of Amcham Shanghais, fordPresent HoneywellPresent Meta And Tesla. Jeffrey Lehman, the chairman of the Business Group, pointed out that the members are affected not only by the US tariffs in China, but also by Beijing's retaliation, since materials that are needed to build the product often come from the USA
US tariffs on Chinese goods are almost 58%, while the China's taxes are around 33%according to the US Peterson Institute for International Economics. The tariffs can vary depending on the product.
Almost two thirds or 65%of those surveyed stated that the current tariffs injured them significantly, especially those in production, Zheng said on Wednesday about CNBCs “The China Connection”.
The competition on the Chinese domestic market is also increasing, while confidence in the five -year local business prospects for one year in a row achieved a record low, the study by Amcham Shanghai showed.
Only 28% of the respondents stated that their China margins were higher in 2024 than that of their global business, while 33% said that their performance in China was actually worse.
US companies also said that their Chinese competitors were further advanced in six out of eight categories, especially at the speed of market launch and the introduction of artificial intelligence. About 41% of those surveyed stated that Chinese companies developed the introduction of AI more, with this proportion in retail and in the consumer industry to rose to 62%.
“We see AI as another area in which we can compete here in China, but then we have to find a way,” said Zheng. “On the one hand, we have to be compliant because there are certain rules for export control that we have to follow as American companies. At the same time, we still have to investigate potential opportunities in this country, including cooperation with Chinese partners.”
Amcham Shanghai members looked at their Chinese colleagues with a good lead only for product quality and development metrics.
Improvement of the business environment
While the trade voltages and concerns about China's economic slowdown burdened the short -term prospects, the respondents showed the respondents a significant improvement in the local regulatory environment.
Almost half or 48%stated that the regulatory environment was transparent for their industry, a big leap of only 35%in 2024. The proportion of companies said that the lack of transparency decreased by 12 percentage points to 16%.
The proportion of respondents who indicate that foreign and local companies were treated equally 5 percentage points to 37%.
In recent years, Beijing has strengthened its efforts to attract and maintain foreign investments, with increasing commitment and friendly political announcements. At the beginning of this year, China released a “action plan” that facilitated measures for foreign companies to invest in biotechnology and at the same time clarify standards for the government's procurement.
The survey of Amcham Shanghai, however, showed that 14% of those surveyed reported that the environment of foreign companies in China deteriorated, with the technology sector playing the highest challenges in 31% of the industry respondents.
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– Victoria Yeo from CNBC contributed to this report.