Eric Zheng Highlights Erosion of Trust Among US Firms in China’s Business Climate

US Firms Face Confidence Crisis in China's Business Environment

Eric Zheng's recent remarks shed light on the growing apprehension among American businesses operating in China. According to the China Business Climate Report by the American Chamber of Commerce in Shanghai, a staggering 25% of firms have cut investments in China, reflecting a notable decline in optimism.

Key Findings from the Survey

• 66% of respondents reported profitability in 2023, down from 68% in 2022.
• Only 47% are optimistic about China's five-year outlook, a dip from 52% the previous year.
• Only 13% currently view China as their top investment destination.
• A record 25% of firms reduced their investments in China.

Challenges and Opportunities

Many US companies cite geopolitical tensions as a significant challenge, alongside China's economic slowdown. Despite these challenges, there remains a substantial amount of potential investment awaiting opportunities in China. Jeff Yuan from PwC China emphasizes that the commitment to China is evident as foreign enterprises seek to adapt to changing market dynamics.

Call for Market Reforms

According to the survey, approximately 56% of respondents would increase investments in China if offered greater market access. Both Eric Zheng and other industry leaders urge Beijing to implement pro-market reforms to enhance the business landscape.