The flags of China and the United States are wandering near the Bund, before the US trade delegation met with its Chinese counterparts at talks in Shanghai in China, July 30, 2019.
Aly's song Reute
Beijing – according to a business research published on Thursday, a record number of American companies in China accelerates its plans to transfer production or supplies.
According to the annual research of the American Chamber of Commerce in China, about 30% of respondents considered such diversification or began it in 2024, which exceeded the previous record of 24% in 2022.
This also exceeded the share of 23% reported in 2017, when he was the president of the USA Donald Trump He began his first term and began to raise duties on Chinese goods.
In addition to the tensions between the USA and China, “one of the main effects we saw in the last five years was Covid and how China closed before the world because of Covid” – Michael Hart, president of Amcham China based in Beijing, told journalists in Thursday.
“It was one of the greatest release factors when people realized that they had to diversify their supply chains,” he said. “I don't see the slowdown of this trend.”
China limited international travels and closed parts of the country during the Covid-19 pandemic, trying to reduce the spread of the disease.
Although India and the countries of Southeast Asia remain the most popular direction of transferring production, the study showed that 18% of respondents are considering transferring production to the United States in 2024, compared to 16% in the previous year.
Most American companies did not plan to diversify. Just over two -thirds, i.e. 67% of respondents, said that they did not consider the transfer of production, which means a decrease of 10 percentage points compared to 2023, as the study showed.
The latest study of Amcham China was attended by 368 members from October 21 to November 15. Trump was re -elected US president on November 5.
Trump confirmed this week plans to increase customs duties on Chinese goods by 10%And he said that duties could be applied on February 1. This is a consequence of the increasingly sharper position of the USA regarding China. The Biden administration emphasized that the United States competed with China and imposed radical restrictions on Chinese companies to the latest American technologies.
Over 60% of respondents said that tensions between the USA and China will be the biggest challenge for conducting business activity in China in the coming year. The study shows that the second largest challenge for American enterprises operating in China is competition from local state -owned or private enterprises of Chinese enterprises.
Slower economic growth
The slowdown of growth in the second largest economy of the world contributes to geopolitical pressure, and consumer expenditure is limited from the pandemic time. At the end of September, the Chinese authorities began to increase efforts to stimulate growth and stop the breakdown on the real estate market.
The third year in a row over half of the respondents Amcham China said that she did not make a profit in this country, adding that the region became less competitive in terms of margins compared to other global markets.
The study shows that the percentage of companies that no longer mention China as the preferred direction of investment increased to 21%, which means doubling the level before Pandemic.
However, looking to the future, technology, industrial and consumer companies stated that they perceive the increase in national consumption as the greatest business chance for 2025 – according to the study. Service companies have found that Chinese companies wanting to expand their activities abroad are the greatest chance for them.
Hart noticed that many members are still optimistic perceived Chinese consumers as a “large and important market.”