US firms more upbeat on doing business in China under Biden: Survey

SHANGHAI • Just over half of American companies are more optimistic about doing business in China on expectations of better trade relations with the United States under a Biden administration, according to a survey by the American Chamber of Commerce (Amcham) in Shanghai.

"Companies broadly view the prospect of a Biden administration favourably," the trade lobby said in a statement yesterday, citing the result of a survey of 124 American companies. "This may be due to expectations that the US-China relationship will become more stable than it was the past four years, though it is unlikely to return to the pre-2016 paradigm."

The survey, conducted from Nov 11 to 15, showed 54.8 per cent of the respondents have become more upbeat about their business prospects in China, while only two companies said they are more pessimistic. Nearly 57 per cent of respondents do not expect trade restrictions or tariffs to increase, according to the survey.

It remains unclear whether President-elect Joe Biden will aim to counter China's rise as robustly as President Donald Trump did in the last four years.

On the campaign trail, Mr Biden stopped short of specifics on which parts of the Trump-era China policies he would change, though he also criticised Beijing for its actions in Hong Kong and Xinjiang.

Despite the uncertainty, US manufacturers in China have no intention of pulling out.

Some 82 per cent of businesses have no plans to offshore their manufacturing in the next three years. One company intends to move all of its production offshore, while two anticipate moving more than 30 per cent offshore.

Managers of some Chinese manufacturers interviewed by Bloomberg early this month said they are worried the US under Mr Biden will remain hostile towards the nation. US tariffs on billions of dollars worth of Chinese goods will be retained, as will strict restrictions on technology and investment, they said.

The following is a key summary of the Amcham survey:

  • 54.8 per cent said they are more optimistic about doing business in China; 35.5 per cent see no change; 8.1 per cent are much more optimistic; while only 1.6 per cent (or two companies) said their thinking about doing business in China was now more pessimistic.
  • Asked about investment or de-risking plans under a Biden administration, 53.2 per cent of companies expect no change in their investment plans; 13.7 per cent expect an increase; and just 5.6 per cent will "commence, continue, or consider a China de-risking strategy".
  • Companies are more optimistic now about their expected 2020 revenue outcome compared with July, with 47.6 per cent of respondents expecting an increase over last year's results.
  • 29.8 per cent of respondents believe that US-China trade tensions will continue indefinitely, versus the 26.9 per cent who agreed with this statement in a separate survey of Chinese businesses by the chamber.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on November 21, 2020, with the headline 'US firms more upbeat on doing business in China under Biden: Survey'. Print Edition | Subscribe