US business optimism in China rebounds to pre-trade war levels
US companies' optimism about business conditions in China has recovered to three-year highs, an annual survey revealed on Thursday.
The American Chamber of Commerce in Shanghai, which conducted the survey with consultancy firm PwC China, attributed the renewed optimism to rising revenues as well as ebbing concerns over the COVID-19 pandemic in China, which has largely stopped its spread with a zero-tolerance policy.
US-China relations reached a nadir in 2019 during the Trump administration, which launched a bruising trade war with China and also floated sanctions toward some of China's high-profile tech companies. The Biden administration, however, has shown more reservation toward taking direct action against Beijing, though relations remain tense.
"Business in China recovered quickly from last year's lockdown," said Ker Gibbs, president of the American Chamber of Commerce in Shanghai, which published the survey that was conducted between mid-June and mid-July.
"However, we are still feeling the pandemic's effects, with members continuing to be negatively impacted by China's travel restrictions. Overall business performance is good but there are signs of nervousness."
Of the 338 respondent companies, 78 percent described themselves as "optimistic or slightly optimistic" about their five-year business outlook in 2021, nearly 20 percentage points more from 2020 and a return toward 2018 levels, the survey said.
By contrast, in 2021, 10 percent of respondent companies described themselves as "pessimistic" about their five-year outlook, compared to 18 percent and 21 percent of respondents in 2020 and 2019, respectively.
About two-thirds said they plan to increase their China headcount this year, a 31.4 percentage point increase from 2020, but 62.3 percent of respondents described workforce availability as posing some hindrance or a serious hindrance to operations.
China's borders remained closed to most visitors without proper work and residence permits, and all entrants must complete at least two-week quarantine upon arrival.