American companies increasingly look outside of China after Covid

BEIJING — Nearly doubly arsenic galore U.S. companies chopped their concern successful China this twelvemonth versus past year, the American Chamber of Commerce successful Shanghai recovered successful its latest survey, released Friday.

For 2022, 19% of respondents said they were cutting concern successful China, up from 10% successful 2021, the study said.

The apical reasons for doing truthful were Covid-related shutdowns, question restrictions and proviso concatenation disruptions, survey respondents said.

"Confidence has been shaken," the American Chamber of Commerce successful Shanghai said.

The metropolis of Shanghai suffered 1 of the harshest lockdowns successful China earlier this year, dragging down the nationalist system successful the 2nd 4th with hardly immoderate growth. A bounce of 3.9% successful the 3rd 4th brought year-to-date GDP maturation to 3% — good beneath the authoritative people of astir 5.5%.

One-third of respondents redirected planned China investments to different destinations successful the past year, the survey found.

That's astir doubly the fig past year, the study said, noting Southeast Asia was the astir fashionable destination, followed by the U.S.

Southeast Asia attracted the bulk of redirected investment, particularly successful tech, logistics and retail, the survey found.

The survey had 307 respondents betwixt July 14 and Aug. 18, earlier the latest U.S. export controls connected the semiconductor industry.

Over the adjacent 1 to 3 years, 1 retail subordinate said it was moving each accumulation retired of China, on with 1 manufacturing company, the study showed. In all, the survey showed 9 firms moved much than 30% of their manufacturing capableness retired of China.

The immense bulk of companies successful the chemicals, pharmaceutical, aesculapian devices and beingness sciences industries planned to support operations successful China, the study said.

Beijing has emphasized it wants the state to absorption much connected higher-end manufacturing, portion factories successful much labor-intensive industries person been moving to different countries wherever wages are lower.

But China remains a captious supplier for much U.S. and EU goods than the different mode around, according to an Allianz Research study this month.

"This means that, successful an utmost script wherever US-China and US-EU-China commercialized relations are wholly chopped off, the US and Europe person much to lose," the study said. "The nonaccomplishment of captious supplies would outgo 1.3% of GDP for the US and 0.5% of GDP for the EU, but 0.3% of GDP for China."