Biz optimism on U.S.-China back to Trump era, AmCham survey says

BEIJING — American businesses in China no longer expect relations between the two countries to improve from the tensions of the Trump administration, according to a business association survey.

After President Joe Biden was elected in late 2020, there was a spike in optimism among businesses, with 45% of respondents expecting better U.S.-China relations, the American Chamber of Commerce in China’s annual survey of members found.

That level of optimism has dropped to 27% of respondents in the latest survey — conducted in fall 2021 — the same as when Donald Trump was president and enacted tougher policies on China. Rising U.S.-China tensions has ranked among the top five challenges for doing business in China since 2019, the survey said.

“There was a level of perhaps hope and optimism once Biden entered office that the relationship would improve,” Alan Beebe, president of AmCham China, said Tuesday in a call with reporters.

“But I think what we’ve seen over the course of the last year is that there’s a new reality that has set in, where largely speaking many of the policies and sentiment of the Trump administration remain in place with the Biden administration,” he said.

Since Biden took office in early 2021, Trump-era tariffs have remained in place, while the U.S. has added more Chinese companies to blacklists that prevent them from buying from American suppliers.

Trump used sanctions and tariffs in an attempt to pressure China to address longstanding complaints of intellectual property theft, unequal market access and forced transfer of critical technology.

While the Chinese central government has announced policies to address many of these concerns, AmCham said local implementation remains uneven.

The last year of regulatory crackdown and new laws on data privacy have added to American businesses’ challenges to operating in China and caution on future investments, the survey found.

Economists said last month that the worst of the crackdown was likely over as Beijing focuses more on growth, but they noted that does not mean the end or reversal of regulation.

China’s economic slowdown is also affecting business operations in the country, while Covid-19 travel restrictions discourage new, overseas talent from joining local teams.

The share of companies anticipating a year-on-year increase in profits ticked up to 59% in 2021 from 54% in 2020, but well below the 73% seen in 2017 before the pandemic and U.S.-China trade war, AmCham said.

Beebe said a reason for the continued pressure on profits is that companies have not been able to pass on rising production costs while remaining competitive locally.

U.S. businesses in China increasingly feel less welcome and face growing political pressure from Beijing, Washington and media in both countries, the survey found.

More than 40% of respondents said they received pressure to make or avoid making statements about politically sensitive issues, particularly among consumer businesses, the…