US businesses' optimism in China falls to record low, survey shows

By Casey Hall

SHANGHAI (Reuters) - Political tensions, China's slowing economic growth and fierce domestic competition are sapping the confidence of U.S. businesses in the country, with optimism about their five-year outlook falling to a record low, a survey showed.

Only 47% of U.S. firms were optimistic about their five-year China business outlook, a drop of five percentage points from last year, according to the survey published on Thursday by the American Chamber of Commerce in Shanghai.This was the weakest level of optimism reported since the AmCham Shanghai Annual China Business Report was introduced in 1999. Also at record lows were the number of firms profitable in 2023, at 66%.

AmCham Shanghai Chairman Allan Gabor said the trend in falling profitability was due to a combination of factors.

"It's domestic demand, it's deflation, and of course we can’t ignore the membership's perceptions and concerns about geopolitics," Gabor said.