According to the president of the American Chamber of Commerce in China (AmCham China), US businesses are "more negative than they've been in a long time" about doing business in China.
Michael Hart claims that the rivalry between the world's two largest economies has "made business very challenging" as tensions continue to rise.
There seems to be an ever-increasing number of disagreements between the governments of President Xi and President Biden; spanning Taiwan, semiconductors, Tiktok, and the coronavirus in Ukraine.
AmCham China's most recent annual survey of its more than 900 members reflects this. It demonstrates for the first time that 55% of respondents no longer consider China to be one of their top three investment priorities—a location where they should spend money to grow their business.
Sixty-six percent of respondents say that their biggest obstacle in China is the "uncertainty of bilateral relations." At the same time, 49% of respondents believe that China has become less welcoming to foreign businesses. It has been five years since US President Donald Trump stepped up his trade war against "unfair trade practices" like intellectual property theft and the trade deficit by imposing tariffs on $60 billion (£49 billion) worth of Chinese goods.
China carried out its promise to impose its own tariffs in response.
AmCham China members include Nike, Intel, Pfizer, and Coca-Cola, some of the most successful companies in the United States.
After then-President Deng Xiaoping opened the country to foreign companies in December 1978, the latter was the first consumer company based in the United States to sell its products in communist China. Since then, the relationship has been centered on trade. According to Mr. Hart, a turbulent few years are reflected in corporate pessimism regarding the current state of the relationship between the US and China.
He goes on to say, "Companies are just really tired after three years of Covid," bringing attention to a number of additional issues. Executives who are "just not willing" to take on assignments in China, political pressure, and China becoming a less predictable place to do business are just a few examples of these issues.
The data indicate that trade between the two nations reached a record high of $690.6 billion in 2017.
The state of the global economy as a whole will be affected by this manifestation of their mutual dependence. That's according to Eswar Prasad, a Cornell University professor of global trade policy and the former head of the IMF's China Division. "The fact of the matter is that the United States does have a lot of businesses that run their supply chains through China, and China does need a lot of products, especially technology products," he asserts.
"This is important for the global economy because these two countries are important for more than just supply chains. The relationship between these two nations sets the tone for global trade."
By upholding global trade regulations, the World Trade Organization (WTO) is supposed to maintain that harmonious tone.
Notwithstanding, in December, the Biden organization powerfully dismissed two decisions that went in support of China about the duties that were forced by then US President Donald Trump as a component of his exchange war. The United States claimed that they were imposed due to national security concerns over which the WTO had no authority.
According to the Peterson Institute for International Economics, both the United States and China continue to impose tariffs on 66.4% of their imports from China and 58.3% of their imports from the United States, with little indication that either side will lower those tariffs.
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