US Companies Say China’s Economic Slowdown Is a Bigger Threat Than Trade War

us companies say china’s economic slowdown is a bigger threat than trade war

A new survey shows reduced investment, weak income, and job cutbacks. American companies in China are downshifting because of the economic slowdown of the country. Also, the persistence of trade tensions with the US. An annual survey released by the American Chamber of Commerce (AmCham) Shanghai on Wednesday showed that 51% of business lobbyists responded that tariffs in the US and China had hurt revenue. However, AmCham members were pointing towards the interconnected issue of China’s economic slowdown as it is a vital factor obscuring their outlook. Over the years, US companies have been optimistic in Shanghai about opportunities in China. The concerns of Amcham mainly reflect the challenges of high-growth markets, as well as rising costs and intense local competition. The group has approximately 3,000 members and represent around 1,500 companies. The companies represented are Thermo Fisher Scientific Inc., FedEx Corp., Walt Disney Co., Citigroup Inc., Duke University, Wells Fargo & Co., and others.

According to this year survey, around three-quarters of 333 respondents said that they had a profit in China last year. Half of them predicted a 2019 increase in revenue, from 81% in 2018 and similarly in the next few years. Also, in the next five years, they have a positive view of China’s business prospects, accounting for 61%. However, in the past few years, this number is usually 80% or higher. Now, 21% of respondents express a complete pessimism about the five-year outlook, which has not reached 10% in the recent past. According to Mr. Ker Gibbs, President of the Chamber, “This is related to uncertainty, and fundamentally business does not like uncertainty at all.” The results of the survey are unswerving with a survey conducted by members of the US-China Business Council last month. They said that optimism about China is at a historically low level, and more is to stop investing. Only a few companies expect revenue to increase next year.

Nearly 58% of respondents said that China’s economic slowdown is considered to be the biggest challenge in the coming three to five years. Only about one-third of respondents recognized this risk a year ago. AmCham said that 18% of responding members plan to cut Chinese investment this year, three times the number planned to do so last year. 53% of respondents said that tariffs caused investment spending to slow down or decrease, while 20% of respondents said they plan to cut the number.

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