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U.S. companies express optimism with business operations in China

On Behalf of | Mar 11, 2021 | Business Issues

Despite the COVID-19 pandemic and increased challenges in U.S.-China relations, many American companies doing business in China expressed optimism that their respective industries will grow and that the two countries will mend their business relationship.

These were some of the findings from an American Chamber of Commerce survey of 345 U.S. companies that have operations in China. Among the key results were that 81% of the respondents predicted industry growth in 2021, while another 45% expect improved relations between the U.S. and China. The survey took place in October and November.

Intellectual property issues remain concern

The COVID-19 pandemic’s effects on U.S. businesses in China have been drastic. Travel disruptions, entry restrictions into China and global uncertainty greatly affected their operations. Other factors that played roles in that downward spiral included continuing government tensions, significant increases in labor costs, more competition from Chinese companies along with shifting regulations and lack of enforcement.

While intellectual property problems and threats on IT security have long remained issues among U.S. businesses in China, there seems to be some progress. Roughly 37% of survey respondents believed such threats were higher in China than in other countries. That number is down from the 54% who responded to the same question in 2016.

Other survey findings include:

  • Just 56% of the U.S. companies made profits last year, while 20% sustained losses.
  • More than 60% predicted the Chinese government would open more markets to foreign investors.
  • Technology companies expressed the most optimism regarding market growth as 86% predicted expansion.
  • When addressing trade talks, 71% of respondents were hopeful that China would further open its markets; 48% sought the increased protections regarding intellectual property and 40% sought lower tariffs.

Without optimism, where would any business relationship be? As long as some U.S. companies look with optimism at their operations in China, the future looks bright. However, these companies also must be realistic.