US companies plan to stay in China despite Trump’s threat to ‘decouple’ trade

While the Trump administration has pushed to decouple US-China trade, a new survey has found that 92.1 percent of American companies in China have no plans to leave the country.

According to the research from the American Chamber of Commerce, only 5.1 percent of companies with global revenues over $500 million plan to leave China.

Only 4.3 percent of AmCham’s members plan to move parts of their operations back to the United States, which is the fourth most popular destination for diversifying supply chains. Some 70.6 percent of businesses plan no change in production allocation, up 5.1 percent on last year.

More than 85 percent of the polled firms have been in China for a decade or longer, with just 4.6 percent there for under five years. “Our membership is fairly stable, most companies have been here a long time and are well-rooted,” said Ker Gibbs, the president of the chamber, as quoted by South China Morning Post. “But this is why we’re also so disturbed to see all the calls for decoupling. Our biggest concern is to understand what the White House’s goals are and where we are headed.”

The survey showed that some 22.5 percent of respondents were delaying investments due to trade war tariffs, compared to 32.3 percent in 2019. More than half of them are now operating a ‘China-for-China’ strategy, meaning they serve the mainland with their operations there, with facilities elsewhere catering for demand outside China.

One-third of US firms in China said that the worsening US-China relationship is impacting their ability to retain staff in the country. “Members are concerned, but dedicated to the market, which is attractive, large, and growing. We are aware of the national security issues and members hope that there can be some rebalancing of the relationship,” Gibbs said. “A lot of members do feel a bit of whiplash from the past three and a half years and want to see a more long-term strategy,” he explained.

In his Labor Day address to the nation, President Donald Trump lashed out at US companies that offshore to China, threatening to curtail federal contracts and even decouple the world’s two largest economies. “We lose billions of dollars, and if we didn’t do business with [China], we wouldn’t lose billions of dollars,” said the American president. “It’s called decoupling, so you’ll start thinking about it,” Trump continued, without explaining what would happen to the trillion-plus dollars in US debt held by Beijing.

“No country… has ripped us off like China has,” Trump said.

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