As per the American Chamber of Commerce, Shanghai, China’s tariffs are the main reason for US investment retreat from China as US businesses are getting affected by the tariffs. As per the reports, China has also restricted the US firms to enter their local markets which is yet again posing great difficulties for the American companies to carry on their business in China.
Another longstanding complaint came from the US companies doing business in China is that most of the Chinese industries are barred from doing foreign businesses. This restricts the scope of business of US firms. Apart from the limited trade opportunities available to the US firms in China, they also face another hurdle in doing business in China; they face huge competition from both the state-owned and private enterprises that benefit from local policies.
As per the AmCham research done in partnership with PWC, industries like hardware, software, or technology has diverted their investment destinations from China to other regions due to these issues. The Presidents of both the nations, Donald Trump and Xi Jinping, however, agreed to come into terms to resume trade.
Some of the respondents of the research agreed that, if US firms are given greater access to the Chinese domestic markets, it can reap benefits for both the nations. The latest AmCham survey also showed the other reasons for the US investment retreats from China. According to them, the forcible transfer of critical technologies to Chinese firms are posing challenges to the US firms operating in China. Also, the lack of protection for intellectual properties is yet another challenge that the US firms are citing for operating in China.
The US business presence has always been very strong in China, but the retaliatory tariffs are hitting the revenues compelling the US firms to change their business strategies with China.