US firms in China expect less rosy times as economy slows
SHANGHAI (Reuters) – US companies in China have a less rosy outlook for business conditions over the next five years due to a slowing economy, an “opaque” regulatory environment and rising domestic competition, a US business lobby survey showed on Wednesday.
The annual report by the American Chamber of Commerce in Shanghai – the self-dubbed voice of American business in China – said 43 percent of respondents in a survey of its members were “optimistic” about prospects. The reading was the lowest since the series began and compared with 53 percent a year earlier. Those who were “slightly optimistic” rose to 42 percent from 33 percent.
Chinese economic growth hit a 24-year low of 7.4 percent in 2014, and the government is widely expected to cut the growth target this year to around 7 percent – the lowest goal in 11 years – at the National People’s Congress starting on Thursday. AmCham’s survey, conducted from late October to early December, made no mention of China’s plans to introduce a counter-terrorism law that would require technology firms to hand over encryption keys and install security “backdoors”.
In an interview with Reuters on Monday, US President Barack Obama sharply criticized the new law, urging China to change the policy if it wants to do business with the United States.
Over half of companies surveyed felt there was an increased chance of being targeted by a government anti-monopoly drive which in recent years has enveloped industries as diverse as milk powder makers, electronics firms and car manufacturers.
Nearly a third of respondents said such investigations pose great risk to their businesses, up from 13 percent in 2014, with companies in healthcare, technology, telecommunications and autos most concerned, the survey showed.
Foreign business lobbies have expressed concern over the investigations, with worries ranging from the perceived unfair targeting of foreign firms to the apparent use of strong-arm tactics by regulators.