U.S. business optimism in China is at a record low, the American Chamber of Commerce said Tuesday after an annual survey, with investors painting a gloomy picture of the outlook for the world’s second-largest economy.
As Chinese stock markets continue to trade at depressed levels and U.S.-China tensions remain in the spotlight, American business confidence in the country is just the latest indicator of headwinds facing Asia’s economic powerhouse.
The percentage of U.S. companies optimistic about the five-year business outlook in China fell to 52%, the lowest in the history of the American Chamber of Commerce in Shanghai’s survey, started in 1999, which in 2023 polled 325 members. A muted outlook among U.S. companies operating in China dovetails with the spate of data in recent months pointing to a slowdown in the Chinese economy, a trend that has rattled global markets and hit shares in companies like
Alibaba
(ticker: BABA).
Just 40% of respondents expect revenue growth in China to outpace their companies’ worldwide growth over the next three to five years, a seven percentage-point drop from last year. It could suggest that the era of impressive growth for American companies in China may be over, with 40% of companies surveyed redirecting or planning to redirect investment from the country, with most looking towards Southeast Asia.
Much of the deteriorating business climate reflects souring U.S.-China relations, officials at the American Chamber of Commerce said, in addition to the economic slowdown spurred by Covid lockdowns that rocked the country last year.
“China is becoming more challenging for foreign investors … China’s legal and regulatory environment is becoming less transparent and more uncertain,” said Sean Stein, chairman of the American Chamber of Commerce in Shanghai. “A series of reforms announced in August signal the Chinese government’s desire to improve the investment climate. If implemented, those reforms could reduce uncertainty and help restore investor confidence.”
Write to Jack Denton at [email protected]
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