Washington-Beijing tensions biggest worry of US firms in China

Washington-Beijing tensions biggest worry of US firms in China — report

/ 12:15 PM April 23, 2024

Tensions between Beijing and Washington are the biggest worry for US companies in China, report says

A hostess walks by the national flags of the United States and China ahead of the bilateral meeting between U.S. Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng, at the Guangdong Zhudao Guest House in southern China’s Guangdong province, April 6, 2024. Simmering tensions between Beijing and Washington remain the top worry for U.S. companies operating in China, according to a report by the American Chamber of Commerce in China released Tuesday, April 23, 2024. (AP Photo/Andy Wong, Pool, File)

Simmering tensions between Beijing and Washington remain the top worry for American companies operating in China, according to a report by the American Chamber of Commerce in China released Tuesday.

The survey of U.S. companies showed that inconsistent and unclear policies and enforcement, rising labor costs, and data security issues were their other major concerns. It also showed that, despite the insistence of Chinese leaders that Beijing welcomes foreign businesses, many are still hindered from free competition.

Article continues after this advertisement

“The Chinese government has stated that it encourages foreign direct investment, but many of our members continue to encounter barriers to investment and operations including policies that discriminate against them and public relations campaigns that create suspicion of foreigners,” the AmCham China report said.

FEATURED STORIES

READ: China vows to treat foreign firms equally

The report welcomed an improvement in relations in 2023 that was capped by summit meetings of Chinese leader Xi Jinping and President Joe Biden but said the U.S. presidential election in November was “looming large” over the future business environment.

Article continues after this advertisement

High-level exchanges

More recently, U.S. Treasury Secretary Janet Yellen visited Beijing, where she raised concerns that potential overcapacity in Chinese industries — such as electric vehicles, steel making, and solar panels — might crowd out U.S. and other foreign manufacturers.

Article continues after this advertisement

“We recognize that there are significant areas of contention in the U.S.-China relationship, many of which have no easy or short-term prospects for resolution,” it said.

Article continues after this advertisement

The report said the Chamber saw high-level exchanges and communication between the two sides as a top priority.

American companies operating in China saw improved profits last year, though slightly less than half expect to be profitable in 2024.

Article continues after this advertisement

Still, many members of the American Chamber said they were more optimistic about the growth of China’s economy.

READ: China’s economy grew 5.3% in first quarter, beating expectations

Among its many recommendations, the report urged China to create and implement “transparent and practical economic policies which treat domestic and foreign entities equally.”

Referring to concerns over the risk of being caught up in accusations they have violated China’s national security, it also appealed to China’s leaders to clarify and narrow the scope of the country’s anti-espionage law to prevent it from interfering with normal business operations.

READ: China plans new rules on market access, data flows

Such requests follow repeated raids on foreign companies that Chinese authorities say were conducted on national security grounds.

Recommendations

The report also had recommendations for the U.S. side, including providing clear visa policies for Chinese students to show they will be welcomed. Similarly, American students should be encouraged to study in China, the report said.

It also called on U.S. officials to avoid resorting to unilateral controls that may be ineffective and fail to meet goals for national security and foreign policy. Washington should engage with Chinese companies to allow them to address export control concerns such as military use of civilian technologies before the companies are subjected to sanctions, it said.

The 617-page bilingual report provided hundreds of recommendations spanning a wide variety of industries, from sports and online streaming to occupational safety issues and rural traffic management.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

American companies generally are not planning to move supply chains out of China given how large and important it is as a market of 1.4 billion people. But their willingness to increase investments there and make it their strategic focus has been decreasing as its advantages diminish, the report said.

TAGS: amcham, China

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.