American businesses are feeling the heat, when it comes to operating in China. The American Chamber of Commerce (AmCham) in China recently conducted a survey of its members. Results reveal that doing business in the country may not be as rosy as it sounds. Regulatory hurdles, protectionism and deteriorating US-China relations make companies feel unwelcomed in the country. However, the Chinese President Xi Jinping was recently at the World Economic Forum in Davos, Switzerland. He spoke about free trade at the forum. but US businesses want him to follow it up with actions.
The survey interviewed 500 of its members for AmCham’s 2017 business climate survey. These were businesses in diverse fields such as manufacturing, technology, etc. According to the survey results, 4 out of 5 American businesses in China opine that they feel less welcome in the country than earlier times. Many companies also revealed that China is no longer a global priority for them.
An article in LA Times adds that only 56 percent of those interviewed revealed that the country makes it to their top three global priorities. This is a sharp decline from 78 percent in 2012. Also, around one-third of US businesses said that they were not going to increase their investments in China this year. Half of the respondents said that they might maintain or fire their staff in the country.
US-China relations impacting businesses
Around 70 percent of respondents also said that the state of US-China relations also impacted their businesses in the country. A fact that US President-elect Donald Trump has been critical of China ever since he started campaigning for Presidency has not helped these companies. Many believe that it is this anxiousness over the trade relations between two countries that is fueling the hesitation, some believe the reasons are completely different.
China: not practicing, only preaching?
Some American businesses criticize China for not following their talks with actions. For instance, when Chinese President Xi Jinping spoke about free trade and likened protectionism to locking oneself in a dark room in Davos, businessmen were unimpressed. An article in Sydney Morning Herald states that American businesses in the country believe that China has not been practicing its preaching.
Many believe that the government is moving towards more protectionism, which is quite contrast to what it propagates. However, they do not support Trump’s claims that China has been manipulating the yuan to give its exporters an advantage. The AmCham survey also listed out three top concerns faced by US businesses in the country.
Irregular law enforcement and unclear laws was the top concern. Others thought rising cost of labor was second hurdle to business while protectionism a third. However, it should be noted that it was not just American businesses, which were feeling the heat in China. German Ambassador in China too voiced a similar concern about officials “trying to tilt the playing field towards purely domestic companies.”
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