Setback for QUAD? Survey Suggests Almost All American Firms are Bullish on China
19:56 GMT 23.09.2021 (Updated: 10:39 GMT 19.07.2022)
© REUTERS / Kiyoshi Ota/PoolFILE PHOTO: Indian Foreign Minister Subrahmanyam Jaishankar, Japan's Foreign Minister Toshimitsu Motegi, Australia's Foreign Minister Marise Payne and then-U.S. Secretary of State Mike Pompeo, since succeeded by Antony Blinken, pose for a picture before the Quad ministerial meeting in Tokyo, Japan October 6, 2020
The QUAD, a group comprised of India, the US, Japan, and Australia, has been trying to ensure uninterrupted trade even if tensions erupt with China. India and other nations have taken steps in the last few years to convince multinational companies to shift their manufacturing base from China, but none have as yet been successful.
A day ahead of the QUAD leaders' meet in Washington, a new survey has found glaring differences in thinking between member countries and American firms carrying out business in China.
"US Multi-National Companies (MNCs) are bullish on China," reads a state-sponsored 2021 China Business Report, released by the American Chamber of Commerce in Shanghai on Friday.
The report, said to be based on a survey conducted among 338 out of the 1,400 member companies of the American Chamber of Commerce, claims that 90% of pharmaceutical, medical device, and automobile industries expect growth in their revenue in 2021.
The members reportedly spelt out their businesses favouring the Chinese economy, as 60% of respondents said they are increasing investment this year compared to previous year, up from only 20% of members in 2020.
Overall, about half of those surveyed are producing goods and services for customers in China. Last week, Tesla founder Elon Musk lauded the growth potential of China's market after the firm reported the best sales and exports to date in August. According to the data, the electric vehicle maker sold 44,264 units in China while its exports of China-made cars hit a record high of 31,379 in the same month.
"Speculation that some US companies might move production or supply chains out of China in the aftermath of COVID-19 proved unfounded," the report said.
There have, however, been reports about the presence of loopholes in the data safety of China-made Tesla cars. Tesla last month temporarily halted some operations at its Shanghai factory as the global shortage of semiconductors also hit the electric carmaker, Bloomberg News reported.
Other companies have shown some interest in the Chinese economy, as 70% of respondents reportedly expect revenue gains in China to exceed their companies' worldwide growth in the next 2-3 years.
"To continue attracting US businesses and investment, China must endeavor to create a stable business environment," the American Chamber Commerce in Shanghai president, Ker Gibbs, said in a statement.
This state-sponsored survey arrives against the backdrop of QUAD's first in-person leader summit, where they will likely seek to ensure "resilient, diverse and secure technology supply chains for hardware, software, and services."
Decoupling from China has reportedly become a buzzword, as any trade tension between China and other QUAD nations could disrupt sections of the global marketplace. The US has long urged India to reduce its economic dependence on China, the world's second-biggest economy. Despite these efforts, China is India's biggest trading partner in 2020.
Reports, including the World Investment Report 2020, have suggested that capital-intensive industries such as automobiles and telecommunications would be very difficult to move from China.