Illustration: Tang Tengfei/Global Times
An annual survey by the US-China Business Council (USCBC) showed on Monday that US business optimism about future business prospects in China has fallen to an all-time high, even as they continued to report strong measures performance for the past year. Specifically, 89% of companies surveyed indicated that their operations in China are profitable.
The survey of more than 270 U.S. member companies operating in China also claimed that U.S. companies generally see China’s COVID-19 containment strategy and geopolitical tensions between the U.S. and China as key challenges.
First, regarding China’s COVID-19 containment strategy, given the sporadic outbreaks of COVID-19 in recent months in several major economic centers, including Shanghai, it is understandable that the operations of many companies, including including those of the United States, have been affected. However, unlike the economic crises looming around the world, including in major economies like the United States, the Chinese economy remains strong and the Chinese market remains a top destination for foreign investment despite the short-term impact. term.
In the face of serious epidemic situations in the second quarter, China’s effective coordination of epidemic control and economic activities has reached a balance, which has helped to minimize the impact of the epidemic on public health and the economy. Thanks to targeted policies to safeguard production, most operations of foreign companies in China have resumed quickly.
For example, the automobile manufacturing sector has suffered severe repercussions due to disruptions in the industrial supply chain and logistics caused by the epidemic in many cities, including the economic powerhouse of Shanghai and the manufacturing hub. Changchun automobile. But after production resumed on April 19, Tesla’s Shanghai Gigafactory delivered the first batch of electric vehicles (EVs) on May 11 and has rapidly returned to normal capacity over the past two months, helping it reach one million production at the beginning of the month.
It is thanks to such efficiency in controlling epidemics, its massive size and its growing openness that the Chinese market remains particularly attractive to foreign investors. There are compelling data pointing out that China’s use of foreign capital has achieved remarkable results. In the first seven months of this year, China’s actual use of foreign capital was 798.33 billion yuan ($115.68 billion), up 17.3 percent year on year, according to data. official data.
Despite the challenges, China’s economic fundamentals remain solid. As the world’s second-largest economy, largest industrial country and largest commodity trader, China has a complete industrial system and a very large market advantage, which is the basic condition for foreign investors to remain optimistic about the Chinese market.
Although the United States has stepped up a so-called economic decoupling from China in recent years, China has not wavered in its opening-up efforts, providing new space for the development of foreign capital. Compared with before the epidemic, the negative list for access to foreign investment has been reduced to 31 in December 2021, and the openness in the digital economy, the Internet and other areas continues to expand.
According to data released by the Ministry of Commerce, in the first seven months of this year, the actual use of foreign capital in high-tech industries across the country increased rapidly, with an increase of 17.3% in year-on-year. As the structural adjustment and modernization of the Chinese economy accelerates and innovation becomes the main engine of economic growth, foreign companies have great opportunities in this area.
Given the enormous opportunities in the Chinese market, US companies are advised to make the right choice when it comes to investing in China by avoiding being influenced or even sidetracked by Washington’s growing toxic political rhetoric – or they will lose market share to other global competitors. .
When it comes to concerns over Sino-US geopolitical tensions, US businesses have no one to blame but their own government, which has consistently pushed for a decoupling from China. In this regard, Washington should listen to the American business community and make concrete efforts to stabilize economic and trade relations with China and refrain from erecting artificial barriers such as sanctions and additional tariffs for cooperation between Chinese and American companies.
The author is a journalist at the Global Times. [email protected]