Geopolitical tensions and an economic slowdown have hit US business confidence in China, a new study found.
Just 52% of American firms are optimistic about their five-year China business outlook, the American Chamber of Commerce in Shanghai reported in its annual survey. That’s the lowest level since the survey began in 1999.
Additionally, 40% of the 325 respondents are redirecting or planning to redirect investment originally slated for China.
The sentiment against China comes as the world’s second-largest economy faces a slew of issues, including weaker-than-expected growth, a slumping renminbi, and a property market that’s spent the past two years lurching from one crisis to another.
US firms are also contending with new anti-spying laws in China, as well as more competition from state-controlled companies.
Such a difficult economic environment led commerce secretary Gina Raimondo to raise her concerns on an official visit to China last month.
“Increasingly I hear from businesses, China is uninvestible because it’s become too risky,” she said in comments reported by Bloomberg.
“There are the traditional concerns that they’ve become accustomed to dealing with. And then there’s a whole new set of concerns, the sum total of which is making China feel too risky for them to invest,” Raimondo added.
Global investors are also shunning China, with foreign traders pulling $188 billion from its equity and debt markets between December 2021 and June 2023, according to Bloomberg data.
China’s main stock-market index, the CSI 300, has slumped 23% since the start of 2022, in contrast to a 5% decline for the S&P 500.
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