Record share of U.S. businesses divert China investments. Top choice: Southeast Asia
Original story by
CNBC•Sep 10•Economics, Trade, Investment
📰 Article Summary
A recent survey by the American Chamber of Commerce in Shanghai reveals that nearly half of U.S. businesses have redirected their investment plans away from China, primarily due to escalating trade tensions and concerns over competition within China. The survey, conducted from May to June 2023, found 47% of businesses shifted their investments to Southeast Asia, with India ranking next. The ongoing tariff issues from both the U.S. and China, along with a record low confidence in China's five-year business outlook, are compelling U.S. companies to reconsider their long-term strategies. While some aspects of the regulatory environment have improved, significant challenges remain, particularly in the tech sector.
📌 Key Facts
- Investment Shift: 47% of U.S. businesses surveyed have redirected their planned investments from China, marking the highest figure since 2017. This shift is largely attributed to increasing trade tensions between the U.S. and China.
- Trade Tensions: The escalation in trade tensions and tariffs, with U.S. tariffs averaging nearly 58% on Chinese goods, has forced many companies to seek alternative investment locations, primarily in Southeast Asia and the Indian subcontinent.
- Competitive Landscape: A significant number of respondents believe that Chinese companies are increasingly more advanced in key areas like speed to market and AI adoption, thereby affecting the competitiveness of U.S. firms in China.
- Regulatory Environment: Despite the challenges, the survey indicated a notable improvement in the regulatory environment for foreign companies in China, with 48% reporting increased transparency compared to previous years.
- Sector Challenges: The technology sector reported the most challenges, with 31% of respondents indicating a worsening environment for foreign companies, showcasing the difficulties that still persist amidst any regulatory improvements.
📂 Article Classification
Topic Tags: International Business
📍 Location
Shanghai, China
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