According to the latest survey by the American Chamber of Commerce in the People’s Republic of China (AmCham China) released on Tuesday, March 8, U.S. companies in China feel less optimistic about the business environment.

The key issues that concern investors are tensions between both countries, ongoing COVID-19 prevention, inconsistent policies from regulators, and a slowing economy.

The report stresses that “In 2021, U.S. companies in China reported a mixed picture, balancing slightly improved business performance last year with growing uncertainty about the future of China’s business environment. While 2021 revenue and profitability rebounded compared to 2020, they have yet to return to pre-pandemic levels.”

According to the AmCham’s report, optimism about China’s domestic market growth fell 11 % year-on-year, based on responses from 353 member companies.

The survey noted that U.S. companies said bilateral tensions between the U.S. and China were their top business concerns.

Alan Beebe, the head of AmCham China, commented that most of the policies from the previous U.S. administration were still the same, despite the high expectation that the tensions would change. He said, “I think reality has in a way set in, in that at least some, if not many, of the actions by the Trump administration remain in place.”

The uncertain and inconsistent policy was the top second concern, with more than one-third of businesses saying they would reduce investment in the country because of an uncertain policy environment.

Many respondents from the survey said travel restrictions from China’s zero-COVID policy were another obstacle for their business as companies found difficulty in seeking human resources.

The Wall Street Journal said that more than three-quarters of respondents indicated competent job candidates could not relocate to China, up from 37%, the year before. Almost one-third of respondents stated candidates were unwilling to relocate, up from 18% last year.

It seems that the main challenges have remained the same for the last two years when in 2021, AmCham China also highlighted the COVID pandemic, US-China tensions, among others, were top concerns for U.S. businesses in China.

Last week, China set the target of 5.5% growth for this year, the slowest pace since the country opened its reform in the late 1970s. This shows the difficulties and uncertainties that China might face in 2022.

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