Foreign companies are tempering their business expansion in China as they navigate uncertainties stemming from the country’s slowing economy and tensions with the United States. Still, the majority retain a positive outlook on China’s long-term economic prospects, a survey found, reports Caixin. The American Chamber of Commerce (AmCham) in South China Tuesday published results of a survey showing that 40% of companies studied said they are not planning to expand in China over the next three years, a rise of 9% from a year ago and the highest on record.
The survey collected responses from 183 companies polled between Oct. 9 and Dec. 31, 2023. Of these 49% were from the US while 35% were based in China. The rest were from other regions including Europe. More than half the businesses surveyed were solely owned by foreign investors and 70% have operated in China for more than 10 years.
In 2023, 66% of companies studied reinvested in China in 2023, a decrease of 14% compared with 2022, the report said. This marks a significant shift from the steadier rates of 78-80% seen between 2019 and 2022. American firms led the drop in reinvestment in 2023.