The Strategist

AmCham: Only 1% of American companies is ready to go back home from China

11/02/2018 - 09:36

Most of the US companies operating in China intend to move production outside of China. However, only 1% is ready to return home.

According to a survey by the American Chamber of Commerce in South China, which was attended by over 200 US companies operating in the PRC, most of them are experiencing extreme difficulties due to trade disputes between Beijing and Washington.

64% of companies said they plan to withdraw the supply chains outside of China, but only 1% said they are ready to consider the possibility of creating production bases in North America.

Moreover, the survey showed that although more than 70% of US companies are considering the possibility of postponing or canceling investments in China and moving some or all industries from China, only half of their Chinese counterparts take a similar position.

At the same time, according to AmCham, trade wars increased competition between US companies and their opponents from Vietnam, Germany and Japan. Chinese manufacturers are facing increased competition from Vietnam, India, the United States and South Korea. At the same time, the company notes that customers are postponing orders, or stopping placing them. And this is a sign of a slowdown in global growth, suggesting that the global recession is probably close.

The study showed that the wholesale and retail sectors suffered most from American duties in China. In the US, the agricultural sector received the brunt of retaliatory duties. Nearly 85% of US companies said they were hit by new tariffs. Among Chinese companies, this was stated by 70%.

A third of companies said that the trade dispute led to a reduction in business volumes ranging from $ 1 million to $ 50 million, while almost every tenth manufacturer reported significant business losses of $ 250 million or more.