As the relationship between the US and China becomes increasingly strained, US companies are growing more negative about doing business in China, according to the American Chamber of Commerce in China (AmCham China).
The latest annual survey of AmCham China’s more than 900 members shows that 55% no longer regard China as a top-three investment priority, and 66% see the “uncertainty of bilateral relations” as their leading challenge in China, up 10% from last year.
Additionally, nearly half of respondents think China has become less welcoming to foreign companies.
The relationship between the two countries has been fraught with tension for years, with disputes over issues ranging from Ukraine and coronavirus to Taiwan, Tiktok, and semiconductors.
The trade war initiated by former President Donald Trump only added fuel to the fire. Despite the challenges, trade between the two countries hit a record high of $690.6bn last year, indicating their mutual dependence and the implications for the global economy.
However, the US-China trade relationship is critical to the wider global economy, and the tenor for global trade is set by the relationship between these two countries, says Cornell University’s Professor Eswar Prasad.
He warns that the way the US is approaching its relationship with China could lead to a deterioration of the rules-based global trading system that the US and China have signed on to.
In response to this tense relationship, a growing number of US companies are looking at moving their supply chains outside of China. However, this will only have a limited impact on getting around US-China tensions, according to experts.