Despite an unprecedented downturn in U.S.-China relations during a pandemic, U.S. businesses are not leaving the China market.
The U.S.-China Business Council released its annual survey of members Tuesday, which shows nearly 70 percent expressing optimism about the commercial prospects of the market, and 87 percent of companies reporting that they have no plans to shift production out of China.
But those numbers contradict a trend of progressively diminishing optimism in the short- to medium-term prospects of the China market. One-quarter of member companies have reduced or stopped planned investment in China in the last year.
The top reasons were increased costs or uncertainties from U.S.-China tensions and uncertainty stemming from COVID-19. Full implementation of the Phase One trade agreement is one way to restore confidence as 88 percent of respondents have a positive or somewhat positive view of the agreement, namely because it put a lid on escalating tariffs and added an element of stability to the bilateral relationship.
