U.S. business sentiment in China hits record low as zero-COVID persists, survey shows

SHANGHAI, Oct 28 (Reuters) – Optimism between U.S. and Chinese businesses has hit record lows, an annual survey showed on Friday, as competitive, economic and regulatory challenges add to the pressure of the ongoing COVID-19 pandemic. in front of Beijing.

Only 55% of the 307 companies of the American Chamber of Commerce in Shanghai and consulting PwC China described themselves as optimistic about the five-year business outlook. This reading is the lowest in the survey’s 23-year history and is worse than in 2020, when the first outbreak of COVID-19, and during the trade conflict between Beijing and Washington in 2019.

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In addition, about half of the companies said that their headquarters’ confidence in China’s economic management has declined in the past year and only 18% ranked China as the first in the world’s investment strategy. all of their companies, down to 27% last year.

Respondents interviewed between July 14 and August 18 cited domestic competition as their top challenge for the next five years, followed by US-China tensions, the economic slowdown and travel restrictions. travel and lockdown related to COVID.

Sean Stein, the company’s president, told reporters, “What’s driving a lot of business at night is the competition and the rise of competition from Chinese competitors.”

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He added that in the past the main challengers may have been the state-backed Chinese, but private digital players are increasing in the local market.

Beijing is urging its officials to be more assertive as tensions with the United States grow over China’s policy on Taiwan, its relationship with Russia and, more recently, U.S. efforts to restrict technology transfers. semiconductors and Chinese companies.

In addition, while many countries have reduced the prevention of the coronavirus, China has continued to fight its spread with lockdowns, testing and isolation, which has led to economic growth and caused serious problems in trade.

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Stein said the relaxed COVID-19 policy would “increase” optimism, as travel restrictions have “turned into a pipeline” that senior officials overseas could help manage independently, but warned that alone Can’t bring back ideas from previous levels.

However, the survey found that only 53 companies, or 17%, indicated that they are considering exiting in the next one to three years, because of the market share, lake Water has skills, and a strong supply chain has made many businesses in China despite the challenges.

Reporting by Josh Horwitz Editing by Tomasz Janowski

Our principles: Thomson Reuters Trust Principles.

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