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American companies in China are more optimistic about the prospect of doing business in China under a Biden administration versus a Trump presidency, according to a November survey by the American Chamber of Commerce in Shanghai.
More than 60% of U.S. companies that took part in the survey, which was conducted days after the U.S. election result, said they are “more optimistic” or “much more optimistic” about doing business in China while President-elect Joseph Biden is in office.
A little over a third of respondents said they felt the same as they did before the election, and two of the 124 surveyed companies said they were more pessimistic following the election outcome.
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“Businesses are signaling that a Biden administration will bring more stability to the U.S.-China relationship,” Ker Gibbs, president of AmCham Shanghai, said in a statement. “This will be welcome after several years in which American companies have had to deal with uncertainty and sometimes erratic policies.”
Under President Donald Trump’s administration, U.S.-China relations have have soured.
Actions by Trump, such as limiting visas for Chinese students and journalists and repeatedly blaming China for the spread of the coronavirus, have raised tensions between the two superpowers and contributed to an atmosphere of uncertainty and unpredictability for American companies in China.
U.S. firms strongly opposed Trump’s August executive order to ban Chinese social messaging app WeChat on the grounds that it is a vital tool for communication and business in China. According to an August AmCham survey, 88% of U.S. companies said the loss of WeChat would negatively impact their business operations. (The ban hasn’t gone into effect; a U.S. judge in late October blocked the ban request, saying the government hadn’t presented enough evidence that WeChat poses a security risk.)
And Trump pursued a drawn-out trade war with China that resulted in more than two years of tit-for-tat tariffs that hurt the U.S. economy and U.S. businesses that import to China. The trade conflict forced U.S. companies with supply chain links to China to divert some of those resources from the mainland.
According to the AmCham survey, 28% of U.S. companies think U.S.-China trade tensions will warm within a year, compared to the 14% who thought so in a July AmCham Shanghai survey. Almost 30% of respondents to the November survey think trade tensions will continue “indefinitely.”
Post-election, U.S. companies in China are more optimistic about revenue growth. Almost half of respondents to the November survey expect their 2020 revenue to grow compared to 2019 levels, versus 32.5% who felt that way in July.
Even with a more upbeat attitude, a little over half of respondents said a Biden presidency will not change their investment plans in China; one-fifth said they didn’t know how investments would be affected yet, while 14% said they will increase their investment in China with Biden in office. And a full third of respondents remain “somewhat” or “very” concerned about employee safety around issues like exit bans and detentions in China.
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