BEIJING: US companies in China are forecasting a gloomy year ahead, and many are worried about the deterioration of bilateral trade relations and nearly a quarterly delayed investment, a business survey on Tuesday, February 26.
Investigation of 314 US businesses in the US Chamber of Commerce in China fully investigated the challenges The US business face after Beijing and Washington switched tit-to-tat tariffs of more than $ 300 billion in bidirectional trade.
The report was released two days after US President Donald Trump said he would delay a scheduled further hike in Chinese tariffs this week after he and Beijing both welcomed "substantial progress" in trade negotiations.
The study found that 89 percent of Businesses reported a pessimistic view of the world's most important bilateral trade relationship.
The tariffs hit US firms, raising costs and lowering demand from Chinese consumers with which the e-companies even forced off workers, the survey showed.
Trade between the US and China was among the major concerns of cross-sectoral businesses. Three quarters expect the relationship to worsen further or remain the same this year.
Almost two-thirds said that the tension affected their plans for the market and caused almost quarter to delay further investment in China showed the survey.
The thrill of commerce has caused inspections, reduced customs clearance and increased regulatory control for many companies, the chamber said.
About one-fifth of the companies have moved or are considering moving production outside China, with tariffs and rising costs, according to the survey.
Market access – a long-standing concern for US, European and other foreign businesses and at the top of the Trump management list of gripes – is a problem for about three-quarters of companies.
"China has done our kind of business, which includes importing agricultural products to China, more difficult every year since I come to China," said an anonymous executive, according to the chamber.
Another issue in debate between the world's top two economic forces is the protection of US intellectual property, with Washington accusing Beijing of encouraging theft to American creations.
A third of the companies said it had led them to limit their investments in China, rising to about half in technology and resource and industry sectors.
Nevertheless, 59 percent of companies said that there has been improvement in IP protection in the past five years.
"Yes, there are challenges – many protracted, and many past commitments remain unfulfilled," said Timothy Stratford, head of the chamber, in the report.
"China is still a critically important market for many American companies, and the bilateral economic relationship is too important not to get it right."
Slow growth is also a major concern after the Chinese economy posted its slower expansion for nearly three decades in 2018.  More than half of business development forecasts market growth this year of five percent or less – below the six percent growth target Beijing is expected to announce next month.