US firms in China optimistic about market growth, hope for close partnership: AmCham survey
Trade relations can significantly improve if Trump-era tariffs removed
Published: Mar 09, 2021 07:48 PM
China-US Photo: GT

China-US Photo: GT

As China-US relations face some uncertainties, a survey by the American Chamber of Commerce in China (AmCham China) said that most US companies expect a rosy year for their business growth in the world's second-largest economy, citing China's early containment of COVID-19 and an improving investment environment.

The outlook among foreign businesses in China remains positive, largely due to the Chinese government's early and stringent response to stifle the virus, an improving investment climate, and anticipation of a more predictable policy environment, according to the survey, which was released on Tuesday.

"The optimistic results indicate that from the Chinese government to all companies along the Chinese supply chain, we have proved ourselves to be the most trustworthy partners amid extreme challenges such as the pandemic," 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 on Tuesday.

The survey said that bilateral trade cooperation hasn't and can't be substantially disrupted, despite former US president Donald Trump's destructive policies panned out in the past three years, including tariffs, Li said.

According to the survey, 61 percent of US businesses view China as a priority investment destination and are confident that the Chinese government will further open the huge market to foreign investment.

Graphics: GT

Graphics: GT

Despite widespread reports of pandemic-fueled supply chain disruptions and bilateral trade tension-inspired reviews of risks and vulnerabilities, the results do not indicate a major shift in members' manufacturing and sourcing outside of China. For example, 83 percent of respondents said that their existing manufacturing and sourcing will remain in China.

In the latest sign of a burgeoning China-US trade partnership, commerce between China and the US rose by a staggering 69.6 percent to 716.37 billion yuan ($109.97 billion) in the first two months of 2021, data from the National Bureau of Statistics showed on Sunday.

Both exports and imports saw major jumps. Exports to the US totaled 525.39 billion yuan, an increase of 75.1 percent, while imports from the US stood at 190.98 billion yuan, an increase of 56.1 percent.

"We can cautiously expect that the bilateral trade ties will recover in 2021," Li said, while warning that US firms should keep their distance from any "political maneuvers" while making business decisions if they want to earn money in China market.

The survey also showed that although growth rates hit new lows, China was the only major economy to grow in 2020, resulting in 26 percent stating their 2020 China earnings before interest and tax (EBIT) margins were higher than their company's global margins. 

Members also continued to see improvement in China's enforcement of intellectual property rights (IPR), reporting fewer concerns over IPR leaks and data security risks than in previous years, according to the survey.

The survey comes amid signals showing the Biden administration may broadly continue the tough approach to China as previously taken by Trump. Last week, US President Joe Biden singled out a "growing rivalry with China" as a key challenge facing the US, with his top diplomat describing China as "the biggest geopolitical test" of this century, Reuters reported.

"I don't think the new administration is increasing its pressure on the bilateral relationship. To the contrary, we can expect more normalized and more traditional diplomacy," AmCham China Chairman Greg Gilligan said in response to a question from the Global Times about concerns of a worsening bilateral relationship.

The fact that Biden administration has not removed some of the measures or restrictions put in place by the previous Trump administration doesn't mean it will be getting tougher, said the chairman, adding that he will "remain optimistic, and has the reason to do so."

The report also mentioned that US-China tensions were further strained in 2020, but a rising proportion of member companies said they are optimistic that the relationship will improve in 2021, and 98 percent stressed that positive bilateral relations are important for their business growth in China. 

Respondents in the survey said that refraining from engaging in aggressive rhetoric and tit-for-tat actions is the most important path the US government can take to help foreign businesses, the survey said. 

"It is hoped that the US and China will meet each other halfway and lift the various unreasonable restrictions placed on China-US cooperation as soon as possible, and not create new obstacles," said China's State Councilor and Foreign Minister Wang Yi, on Sunday at his annual press conference.