Nearly 70% of US firms doing business in China oppose tariffs, AmCham Shanghai survey shows
Close to 70 percent of US companies doing business in China opposed tariffs, according to a survey by the American Chamber of Commerce in Shanghai.
The survey also pointed out that most US companies operating in China expected to increase their investment in 2018
China and the US are engaged in a tit-for-tat retaliatory tariff battle but 69 percent of the 434 respondents in the survey opposed tariffs while only 8.5 percent supported them. Another 22.6 percent were unsure how they felt, the report released by AmCham yesterday showed.
"Opposition to retaliatory tariffs was firmest in sectors likely to be targeted by Chinese counter-retaliatory tariffs, including non-consumer electronics (95 percent), chemicals (85 percent) and agriculture and food companies (78 percent)," said Kenneth Jarrett, president of AmCham Shanghai.
Faint support for tariffs was concentrated in services, led by education and training as well as legal services because these businesses felt they had little to lose, Jarrett added.
On a slightly brighter note, the survey also highlighted that most US companies operating in China would increase their investment in 2018, with 61.6 percent eying higher investment led by companies in the technology, services, and aviation sectors. This more optimistic note came despite a mild drop in investment growth in 2017.
More companies are also beginning to prioritize China in their investment strategies.
Companies whose first investment priority was China rose three percent to 27 percent, while 30 percent said it was their second to third priority, the survey revealed.
Overall 80 percent of the companies were optimistic, identical to last year, the chamber said.
Companies also believe that in the past few years Chinese government policies and regulations toward foreign companies have improved slightly with 34 percent of the respondents seeing improvements, a six percent rise from a year earlier, according to the survey.
Meanwhile a clear majority of respondents hailed China's increasing consumption for the opportunities afforded to them over the next three to five years. Companies also welcomed innovations in technology, media, telecommunications and urbanization, according to the survey.
But 44 percent of the companies reported that policies and regulations had remained the same. Over 20 percent of the respondents said the environment had worsened, the report said.
In the next three to five years, companies will face the top three challenges of labor cost concerns, domestic competition, and an economic slowdown, the survey showed.
Also noteworthy, respondents said that lack of intellectual property rights protection and enforcement as well as obtaining required licenses were seen as the top two regulatory obstacles.