A survey found that US companies are losing confidence in China

• Geopolitical tensions and an economic slowdown are sapping American business confidence in China.
• A study found that only 52% of US companies are optimistic about their five-year business prospects in China.
• Deflation, youth unemployment, and the real estate crisis have spooked global investors and companies.

A new study finds that geopolitical tensions and economic slowdown have affected US business confidence in China.

Only 52% of US companies are optimistic about their five-year business outlook in China, according to the American Chamber of Commerce in Shanghai. As stated in its annual survey. This is the lowest level since the survey began in 1999.

In addition, 40% of the 325 participants are redirecting or planning to redirect investments originally planned for China.

The sentiment against China comes at a time when the world’s second-largest economy is facing a slew of issues. Including weaker than expected growthThe declining renminbi, and the real estate market, which has spent the past two years reeling from one crisis to another.

American companies also face new anti-espionage 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 fears On an official visit to China last month.

“I increasingly hear from companies that China is not investable because it has become too risky,” she said in comments reported by Bloomberg.

“There are the traditional fears that they are used to dealing with,” Raimondo added. “And then there is a whole new set of fears, the sum of which makes China feel too risky to invest in.”

Global investors are also avoiding China, where foreign traders pulled $188 billion from equity and debt markets between December 2021 and June 2023, according to Bloomberg data.

China’s main stock market index, the CSI 300, has fallen 23% since the start of 2022, in contrast to the S&P 500’s 5% decline.