That’s the conclusion of the China Business Report released Thursday by the American Chamber of Commerce in Shanghai.
The report stated that of the 306 companies surveyed, 66 percent of them achieved profits in 2023.
The report also found that 47 percent of companies are optimistic about their business prospects in China over the next five years, the lowest level in the survey’s more than two decades.
Beijing and Washington have been at odds in recent years over a number of issues, including trade and industry, as well as China’s claims in the South China Sea.
Economic growth in the communist country is also slowing as weak consumer demand and deflationary pressures persist even after the Covid-19 pandemic.
The report showed that geopolitical tensions between the two countries represent the “biggest challenge” facing American companies in China.
Eric Cheng, president of the American Chamber of Commerce in Shanghai, said at a press conference ahead of the report’s release that the survey was a “balance between risks and rewards.”
“The risks to business in China have increased in the past few years, but at the same time the market is slowing down with weak demand,” he said.
Many American companies are now redirecting their investments to other regions of the world, such as Vietnam, Malaysia and South Asia, Cheng said.
The report said that 25 percent of companies surveyed have reduced their investments in China in 2023, a record number, largely due to concerns about slowing growth in China.
While more than half of U.S. companies expect their revenues to increase compared to last year, only 37 percent expect growth in China to outpace global growth in the next three to five years.
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