[BEIJING – September 10, 2021] A new flash survey from the American Chamber of Commerce in China (AmCham China) shows nearly two-thirds of respondents want the US and the Chinese governments to restore regular visa services and travel channels for business executives and their dependents by the end of 2021. Other top priorities for AmCham China member companies this year include the rebuilding of trust through regularized government-to-government communication, and the removal of bilateral tariffs.
“As the pandemic continues well into its second year, the priorities for our member companies remain consistent, with the resumption of business travel at the top of the list,” said AmCham China Chairman Greg Gilligan. “Meanwhile, the state of the overall US-China relationship is as important as ever to the business community, with members prioritizing concrete results and actions as a way to restore trust between the two countries. Other issues close to the hearts of our members include the removal of bilateral tariffs, restarting people-to-people exchanges, and a meeting between President Biden and President Xi before year’s end.”
AmCham China periodically conducts flash surveys among its membership on important economic and trade issues in US-China relations. This survey was conducted from August 23-25 to better understand how member companies in China perceive current priorities for US-China relations, Phase One Agreement implementation, and the current situation with respect to bilateral tariffs. 125 member companies submitted responses. Highlights from the survey results are summarized below.
What are your top priorities for the US and the Chinese governments?
By the end of 2021
- Restore regular visa services and channels for business executives and their dependents to travel (62%).
- Rebuild trust through regularized government-to-government communication that prioritizes concrete results and actions (54%).
- Remove bilateral tariffs (47%).
- Restart people-to-people exchanges for students, scholars, and journalists (44%).
- Arrange a meeting between Presidents Biden and Xi by the end of this year (38%).
By the end of 2022*
- Provide guidance on how to better support identified areas of bilateral cooperation, (e.g., climate change) (32%).
- Remove bilateral tariffs (29%).
- Rebuild trust through regularized government-to-government communication that prioritizes concrete results and actions (28%).
- Continue efforts to strengthen China’s IP protection (26%). Additionally, 15% selected this as a priority for 2021, suggesting the business community recognizes IP protection continues to be an issue but does not realistically expect bilateral engagement to result in meaningful progress in this area by the end of this year.
- Address China’s cybersecurity policies (such as strict data localization requirements and restrictions on cross-border data transfers) (28%). 22% selected this option as a priority for completion by the end of 2021.
How are bilateral tariffs impacting your China operations?
- 78% of respondents report that bilateral tariffs are impacting their operations in China in some way versus 22% who report no impact.
- The primary impact is felt through:
- Increased costs associated with manufacturing of products (14%)
- Lost business to competitors (12%)
- Decreased demand for products (12%)
- When asked a similar question in our 2021 China Business Climate Survey (BCS) conducted in Nov/Dec 2020, nearly 43% of respondents reported no impact from bilateral tariffs on their China operations (versus 22% today, see above).
What is the impact of the implementation of the Phase One Trade Agreement?
- 65% report that the Phase One Trade Agreement is stabilizing the bilateral relationship. 16% report no impact at all, and 20% say they are unsure.
- 63% say the Phase One agreement is having at least some impact on mitigating the negative impacts of bilateral trade frictions, as compared with 19% who report no impact at all.
- Nearly 40% say the Phase One agreement is having at least some impact on resolving specific challenges their company faces in the China market. However, 34% say it is having no impact at all, while another 26% are unsure.
- 52% indicate that the Phase One agreement is creating a more predictable business environment, while 22% say it is not having an impact on the predictability of the business environment.
- Comparison of results to the same question asked in the latest BCS (surveyed in Nov/Dec 2020):
- 56% reported that the Phase One agreement was stabilizing the bilateral relationship, while 10% reported no impact at all, and 33% who said they were unsure.
- 69% said the Phase One agreement was having at least some impact on mitigating the negative impacts of bilateral trade frictions, while 11% reported no impact at all.
- 39% reported the Phase One agreement was having at least some impact on resolving specific challenges their company faces in the China market, while 21% said it was having no impact at all, and another 41% were unsure.
- 48% indicated that the Phase One agreement was creating a more predictable business environment, while 20% indicated it was not having an impact.
The survey was conducted August 23-25, 2021, and was sent to 697 companies. A total of 125 valid responses with a completion rate of 18% were received from 21 industries (including significant representation from the Agriculture, Healthcare, and Other Services industries). Almost one-third of respondents reported a 2020 mainland China revenue of over $500 million. 65% of survey respondents are their companies’ senior-level country manager.
About AmCham China – US-China Business: The Next 100 Years
The American Chamber of Commerce in the People’s Republic of China (AmCham China) is a non-profit, non-governmental organization whose membership comprises tens of thousands of individuals from nearly 1,000 companies operating across China. The Chamber’s nationwide mission is to help American companies succeed in China through advocacy, networking, insights, and business support services. AmCham China is officially registered as a foreign chamber of commerce in China and is licensed by China’s government to represent American business in mainland China. In addition to our headquarters in Beijing, AmCham China serves Tianjin, Central China, and Northeast China through our Chapters in Tianjin, Dalian, Shenyang, and Wuhan. Across the five offices, AmCham China has more than 30 working groups, and holds more than 150 events each year.
For more information, please contact: Mark Dreyer, Marketing & Communications Director, AmCham China email@example.com