US firms turn upbeat on China after Biden win, AmCham says

Just over half of American companies are more optimistic about doing business in China on expectations of better trade relations with the U.S. under a Biden administration, according to a survey from the American Chamber of Commerce in Shanghai.

“Companies broadly view the prospect of a Biden administration favorably,” the trade lobby said in a statement, citing the result of a survey of 124 American companies. “This may be due to expectations that the U.S.-China relationship will become more stable than it was the past four years, though it is unlikely to return to the pre-2016 paradigm.”

The survey, conducted November 11-15, showed 54.8% of the respondents have become more upbeat about their business prospects in China, while only two companies said they are more pessimistic. Nearly 57% of respondents do not expect trade restrictions or tariffs to increase, according to the survey.

It remains unclear whether President-elect Joe Biden will aim to counter China’s rise as robustly as Donald Trump did in the last four years. On the campaign trail Biden stopped short of specifics on which parts of the Trump-era China policies he would change, though he also criticized Beijing for its actions in Hong Kong and Xinjiang.

Despite the uncertainty, U.S. manufacturers in China have no intention of pulling out. Some 82% of businesses have no plans to offshore their manufacturing in the next three years. One company intends to move all of its production offshore, while two anticipate moving more than 30% offshore.

Managers of some Chinese manufacturers interviewed by Bloomberg early this month said they are worried the U.S. under Biden will remain hostile toward the nation. U.S. tariffs on billions of dollars worth of Chinese goods will be retained, as will strict restrictions on technology and investment, they said.

The following is a key summary of the Amcham survey:

• 54.8% said they are more optimistic about doing business in China; 35.5% see no change; 8.1% are much more optimistic, while only 1.6% (or two companies) said their thinking about doing business in China was now more pessimistic
• Asked about investment or de-risking plans under a Biden administration, 53.2% of companies expect no change in their investment plans, 13.7% expect an increase, and just 5.6% will “commence, continue, or consider a China de-risking strategy”
• Companies are more optimistic now about their expected 2020 revenue outcome compared to July, with 47.6% of respondents expecting an increase over 2019 results
• 29.8% of respondents believe that U.S.-China trade tensions will continue indefinitely, versus the 26.9% who agreed with this statement in a separate survey of Chinese businesses by the chamber