Tensions between Beijing and Washington are the biggest worry for US companies in China, report says

TOKYO – Simmering tensions between Beijing and Washington stay the best worry for American companies running in China, consistent with a report via the American Chamber of Commerce in China launched Tuesday.

The survey of U.S. companies mentioned inconsistent and unclear insurance policies and enforcement, emerging hard work prices and information safety problems have been different best issues. It additionally mentioned that, regardless of the insistence of Chinese leaders that Beijing welcomes overseas companies, many nonetheless are hindered from unfastened pageant.

“The Chinese government has stated that it encourages foreign direct investment, but many of our members continue to encounter barriers to investment and operations including policies that discriminate against them and public relations campaigns that create suspicion of foreigners,” the report mentioned.

The report welcomed an growth in family members in 2023 that was once capped via summit conferences of Chinese chief Xi Jinping and President Joe Biden, however mentioned the U.S. presidential election in November was once “looming large” over the long run industry surroundings.

More not too long ago, U.S. Treasury Secretary Janet Yellen visited Beijing, the place she raised issues that attainable overcapacity in Chinese industries — reminiscent of electrical automobiles, metal making and sun panels — may crowd out U.S. and different overseas producers.

“We recognize that there are significant areas of contention in the U.S.-China relationship, many of which have no easy or short-term prospects for resolution,” it said.

The report said the Chamber saw high-level exchanges and communication between the two sides as a top priority.

American companies operating in China saw improved profits last year, though slightly less than half expect to be profitable in 2024.

Still, many members of the American Chamber said they were more optimistic about growth of China’s own economy.

Among its many recommendations the report urged China to create and implement “transparent and practical economic policies which treat domestic and foreign entities equally.”

Referring to concerns over the risk of being caught up in accusations they have violated China’s national security, it also appealed to China’s leaders to clarify and narrow the scope of the country’s anti-espionage law to prevent it from interfering with normal business operations.

Such requests follow repeated raids on foreign companies that Chinese authorities say were conducted on national security grounds.

The report also had recommendations for the U.S. side, including providing clear visa policies for Chinese students to show they will be welcomed. Similarly, American students should be encouraged to study in China, the report said.

It also called on U.S. officials to avoid resorting to unilateral controls that may be ineffective and fail to meet goals for national security and foreign policy. Washington should engage with Chinese companies to allow them to address export control concerns such as military use of civilian technologies before the companies are subjected to sanctions, it said.

The 617-page bilingual report provided hundreds of recommendations spanning a wide variety of industries, from sports and online streaming to occupational safety issues and rural traffic management.

American companies in most cases are no longer making plans to transport provide chains out of China given how massive and necessary it’s as a marketplace of one.4 billion folks. But their willingness to extend investments there and make it their strategic center of attention has been reducing as its benefits diminish, the report mentioned.