US businesses in China are hesitant about increasing investment due to rising regulatory uncertainties, pessimism over market access and economic growth concerns, a survey released yesterday by the American Chamber of Commerce (AmCham) said.
About 40 percent of the 353 respondents saw the regulatory environment as one of the driving factors of pessimism over doing business in China, up 16 percentage points from a year earlier, the survey said.
More than one-third expect to lower investment due to policy uncertainties, it said.
“In terms of regulatory uncertainties, it’s the technology and R&D [research and development] intensive industries that are feeling that the most,” AmCham China president Alan Beebe said at a briefing.
China’s dual circulation strategy and the call for greater self-sufficiency means it is “working to invest further in technology and having industrial policies that would put companies at a relative disadvantage over time,” Beebe said.
Ambiguity around the “common prosperity” goal also resulted in confusion among firms over how policies might affect them, he said.
Beijing last year carried out sweeping regulatory crackdowns on sectors from education to Internet platforms to address monopolistic practices, narrow the nations’ wealth gap and make economic growth more sustainable.
The campaign has taken a breather since late last year as concerns have mounted over a growth slowdown.
Rising tensions between China and the US remain a top concern for the companies, the survey said.
The respondents’ outlook on US-China relations was less rosy for this year, with 24 percent expecting ties to deteriorate, up from 19 percent.
This could show initial optimism that followed US President Joe Biden’s appointment — and hopes for an improvement in bilateral relations — has faded with many policies of the administration of former US president Donald Trump remaining, Beebe said.
More than 80 percent of the surveyed companies said that increasing the transparency, predictability and fairness of the regulatory environment would encourage more investment, while 65 percent recommended limiting the use of industrial policies that create barriers.
Fewer than half of the companies surveyed were confident in the government’s commitment to further open the market to foreign investment in the next three years, down from 61 percent in the previous year, according to the survey, which was conducted in October and November last year.
Profitability of US firms rebounded from a year earlier, but still has not fully recovered to pre-COVID-19 pandemic levels, the survey said.
Those optimistic about domestic market growth in the next two years declined to 64 percent, from 75 percent a year earlier.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
RSS