What’s new: American businesses in China feel less optimistic about planning major investments in the world’s second-largest economy this year, due to challenges related to the regulatory environment, talent recruitment and the U.S.-China relationship, a new survey shows.
The American Chamber of Commerce in China (AmCham China) said in an annual Business Climate Survey released Tuesday that China remains a top global priority for many members but most are not planning significant investments in 2022.
In 2021, U.S. companies in China reported a mixed picture, balancing slightly improved business performance with growing uncertainty about the future of China’s business environment, the chamber said in a statement.
While 2021 revenue and profitability rebounded compared to 2020, they have yet to return to pre-pandemic levels, the statement said.
In the survey, American companies identified multiple challenges, including sustained air travel disruptions, an increasingly uncertain regulatory environment, difficulty attracting and retaining talent, and the strained U.S.-China relationship, which led to a decline in the level of optimism.
The survey covered around half of the Chamber’s member companies and highlights the impact of Covid-19, regulatory developments, and U.S.-China tensions on member companies.
The background: China-U.S. economic ties have been strained due to overall worsening relations, with both sides engaging in tit-for-tat sanctions over a wide range of issues including Taiwan, Hong Kong and Xinjiang.
Chinese Foreign Minister Wang Yi said during a press conference Monday that the U.S. is “going to great lengths to engage in intense, zero-sum competition with China, it keeps provoking China on issues concerning our core interests, and it is taking a string of actions to piece together small blocs to suppress China.”
“These actions undermine the overall China-U.S. relations and disrupt and erode international peace and stability,” he said.
Contact reporter Lu Zhenhua (zhenhualu@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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