China remains attractive to US firms despite Covid

China’s attraction as a huge, lucrative market for US companies has remained unchanged this year, despite the impact of Covid-19 on the global economy and disruptions to trade, analysts and government officials say.

They made the remark after the Us-china Business Council released a survey on Monday in which US companies continued to report their strong performance in the country last year, with 89% saying their operations were profitable.

The report, compiled by the Washington Dc-based organisation in June, interviewed 117 member companies on issues related to their business outlook, investment climate and market conditions in the nation.

The study found that most respondents are not moving segments of their supply chains out of China. This speaks to the country’s competitiveness in speed, quantity, quality and cost of manufacturing, despite tariffs and other factors.

“China remains a critical market for the US companies, disproving the notion of economic decoupling,” said Bai Ming, deputy director of the international market research department at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

Even though there have been some investment outflows to Southeast Asia due to lower labour costs, it does not conflict with the investment plans of US firms in China, which are more about collaboration in high-tech and service industries and in line with China’s high quality growth strategy, he said.

The Us-china Business Council survey also found that 63% of respondents indicated that their profitability increased last year – a level and proportion unseen in more than a decade.

The performance figures show the potential that the China market holds for US companies.