Survey: US firms in China optimistic for long-term success

US firms operating in China are optimistic about their future in the country, according to a report released by the American Chamber of Commerce in South China (AmCham South China) on Wednesday. Seventy-three percent of the firms reported a positive or very positive overall return on investment in China in 2024.

The report, which surveyed 316 companies in the region, found that 76 percent of those surveyed plan to reinvest in China in 2025, with a sizable number of these setting aside under $10 million each, accounting for 77 percent of the total. A notable six percent of the companies have also allocated over $250 million for reinvestment plans in the coming year. The report estimates that the member companies have set aside $14.59 billion from profits in China to reinvest over the next 3 to 5 years, a surge of 33.18 percent over the previous reinvestment figure. 

At the same time, many big brand US firms are building greater links within the Chinese market as they seek new and emerging opportunities.

New electric vehicle manufacturer Tesla, spearheaded by billionaire Elon Musk, has invested heavily in the Chinese market in recent years. The company's Gigafactory in Shanghai boasts a localization rate exceeding 95 percent, China Daily reported. Despite a slight drop in its global deliveries last year, sales on the Chinese mainland reached a record high of 657,00 units, up 8.8 percent year-on-year, the article stated, adding that Tesla has also been included in multiple local government procurement catalogs, highlighting China's equal treatment of domestic and foreign enterprises.

Another big American company, petrochemicals major ExxonMobil secured access to a $1 billion LNG receiving terminal that commenced operations last September in Huizhou, Guangdong Province under a 20-year usership agreement.

The survey's findings come against a backdrop of unilateral tariffs by the US government against a number of key trading partners, as well as investment curbs targeting China in a weak attempt to sure up the US's own domestic manufacturing base. However, businesses, economists, industry associations and several government leaders of US trade partners have repeatedly stated that the tariffs are misguided and will only serve to increase price burdens on American consumers. 

Dr. Harley Seyedin, chairman and president of AmCham South China, says "Since nearly 75 percent of American companies in China are primarily focused on importing components from the US to produce goods and services in China for China, they believe that continued reinvestment in China is essential for their long-term success."

"Businesses are increasing their commitments in China to secure a stronger foothold in this critical market. The reinvestment surge signals confidence in China's future, and their hope for US-China increased cooperation," Dr. Seyedin added.

{With input from Reuters)