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Over half of US companies in China delay or reduce investment due to trade war

The American Chamber of Commerce in Shanghai warned that with no sign of a trade agreement between US and China, “2019 will be a difficult year” and “2020 may be worse”. It said that “revenue growth projections have lowered, optimism about the future has waned, and many companies are redirecting investment originally planned for China”.

In the 2019 China Business Report, AmCham noted that the survey results are “decidedly mixed”. In particular, revenue growth estimates for 2019 are weak. Only 50.5% of companies expect revenues to beat their 2018 numbers. 27.1% of companies anticipate lower revenues, markedly up from the 6.1% that projected lower revenues for 2018. 47.6% of automotive companies anticipate lower revenues.

Five-year optimism dropped by one fifth to 61.4%, against historical rates of 80-90%, while pessimism about the future rose by 14.0 percentage points. The most downbeat industries included non-consumer electronics and chemicals.

35.6% of survey respondents see the U.S.-China trade tensions continuing for 1-3 years, and 12.7% expect them to continue for 3-5 years. 16.9% believe the trade tensions will continue indefinitely. 53.4% of companies say that they are either delaying or reducing investment as a direct result of the U.S.-China trade tensions, with only 4.5% increasing investment in response.

Full report here.

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