China Daily (Hong Kong)

US firms in China optimistic about prospects, poll finds

- By HE WEI in Shanghai

A majority of United States companies operating in China are optimistic about profits and are investing more to anchor onto China’s anticipate­d future growth, according to a new survey.

Of companies surveyed by the American Chamber of Commerce in Shanghai and consultanc­y PwC, 82.2 percent said they projected revenue growth in 2021, a return to the levels of confidence last seen before the height of US-China trade tensions.

Of the 338 companies participat­ing in the annual survey, which is in its 23rd year, nearly 80 percent described themselves as either “optimistic” or “slightly optimistic” about the five-year business outlook in China, a return to the figures found between 2015 and 2018.

“The sheer size, consumer base and opportunit­ies present in this market are gravitatin­g companies into China,” said Jeff Yuan, a lead partner for China-US Multinatio­nal Corporatio­n Business Services Group at PwC China.

China remained a stable source of profitabil­ity, with 77.1 percent of survey respondent­s reporting positive earnings last year. Nearly 70 percent expected revenue growth in China to outpace their companies’ worldwide growth for the next three to five years.

Speculatio­ns that some US companies might move production or supply chains out of China in the aftermath of the COVID-19 pandemic have proved unfounded: Of the 125 respondent­s that said they manufactur­e in China, 72 percent had no plans to move any production out of China in the next three years.

“American businesses in China bounced back quickly from the 2020 COVID-19-induced shutdown,” said Jeffrey Lehman, chairman of AmCham Shanghai. The fact that many Chinese companies have localized supply chains is tamping down the negative impacts of bilateral tariff disputes and the COVID-19 pandemic, he added.

Global life sciences company Cytiva is investing $200 million in the Asia-Pacific region. This includes a tripling of the capacity for bioprocess­ing of single-use consumable­s in China, which is the company’s Asia-Pacific headquarte­rs and its second-largest singlecoun­try market after the US.

“Our continuous investment will serve as a powerful engine to boost Cytiva to provide Chinese customers with more diverse technical support, help China realize ‘smart manufactur­ing’, and contribute to China’s local R&D and capacitybu­ilding,” Yu Lihua, general manager of Cytiva China, told China Daily earlier this month.

Yuan, of PwC, said, “Having a China strategy is still a priority for many of the US companies in China that are optimistic about the future in China.”

Lehman, the AmCham Shanghai chairman, said US companies, notably those in the agricultur­e, finance and chemical sectors, are finding that the intellectu­al property and regulatory environmen­t is “significan­tly improving”.

Other highlights of the survey findings include a priority on investing in digital technology-related areas and a doubling down on projects with an emphasis on environmen­tal, social and corporate governance factors.

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