A recent survey of Chinese enterprises in the U.S. has found that a majority remain bullish on the market long term despite growing concerns about U.S.-China relations and the broader business environment.
The annual survey conducted by the China General Chamber of Commerce in the U.S. (CGCC) found that nearly 60% of companies aim to maintain a stable level of investment and that about 30% plan to boost it.
“A notable degree of long-term optimism persisted, with the majority expressing positive future revenue expectations,” CGCC said, adding that the survey reflected “a commendable sense of optimism, determination, and resilience.”
The survey was conducted in April and May of this year, polling nearly 100 Chinese companies across various industries about their performance and outlook.
Commitment Amid Rising Tensions
Despite growing negative sentiment about the overall business environment amid rising trade tensions between the world’s two largest economies, Chinese firms remain committed to the U.S. market.
Over 60% of survey respondents saw a deteriorating business environment in the U.S. Meanwhile, the rate of concern regarding a “stalemate in Sino-US bilateral relations political and cultural relations” surged to 93% from 81% a year prior.
The past year has seen the Biden administration ramp up curbs on Chinese businesses, scrutinizing certain China-dominated industries, placing new sanctions on various Chinese firms and goods, and trying to block Chinese ownership of certain companies and platforms.
Challenges in Branding and Marketing
The survey highlighted significant challenges faced by Chinese companies in the U.S. More than 65% of respondents identified a “complexity and vagueness” of U.S. regulatory and sanction policies toward Chinese companies as the main challenge in branding and marketing in the U.S.
“Pervasive anti-China sentiment in American public opinion” was ranked as the second largest branding and marketing challenge, according to 59% of respondents.
“These [results] highlight the intricate policy environment and the hostile public sentiment influenced by ongoing US-China trade tensions,” the report said.
Impact on Profitability
A challenging market environment has broadly impacted Chinese companies’ profitability levels, with firms facing a “significant performance downturn” last year similar to that of 2020 during the coronavirus pandemic.
More companies reported falling revenue, particularly those with significant declines of more than 20%. Companies in that category rose from 13% in 2022 to 21% in 2023.
Call for Coordination
Hu Wei, CGCC chairman and president and CEO of Bank of China U.S.A., called on companies from both China and the U.S. to strengthen coordination to reduce trade frictions and policy barriers.
“From a longer-term perspective, trade and investments have always been the cornerstone of the U.S.-China relations,” he said, adding that despite various uncertainties, China remains the U.S.’ third-largest trading partner and largest importer.
Constructive Engagement Needed
The survey results reveal a complex and challenging environment for Chinese companies operating in the U.S. While long-term optimism and commitment to the market remain strong, the growing regulatory and public sentiment challenges necessitate greater coordination between Chinese and American firms.
The CGCC’s findings underscore the need for constructive engagement to navigate the evolving landscape of U.S.-China business relations.
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