China among top destinations for U.S. firms

China will continue to be attractive for companies from the United States, thanks to its massive consumer market and well-established supply chain networks that are hard to replicate, business leaders and analysts said on Thursday.

Since the content of Sino-U.S. economic cooperation has expanded from just goods trade to all business fields, they stressed that confrontation is not conducive to the interests of either country or the global community. Strengthening political and business relations between the two countries is crucial, not only for driving economic growth but also for improving the well-being of their people.

China's enormous market, supportive policies to attract global capital, ongoing industrial upgrading and its status as an increasingly strong innovator make the country one of the most important markets for many U.S. companies, said Eddy Chan, senior vice-president of FedEx Express and president of FedEx China, adding that the U.S. logistics service provider opened its new China headquarters office in Shanghai last month.

Similar views were voiced by Joe Ngai, chairman for China at global consulting agency McKinsey &Company. "Finding another market that can provide the same level of quality, opportunities and value for investment as China certainly is a challenging task."

Despite some U.S. businesses expressing concerns over de-risking and tariff-driven rising operation costs in recent years, the Chinese market remains significant to U.S. companies. About half of them view it as among the top three global investment destinations, marking a 5-percentage point increase from the record low observed in 2022, according to survey results released on Thursday by the American Chamber of Commerce in China.

The China Business Climate Survey, conducted in October 2023, found that rising tensions in U.S.-China relations have been the top concern for U.S. businesses in China since 2021. This issue continues to be ranked as top priority among members of AmCham China. A total of 343 U.S. companies provided data for the study.

Sean Stein, chairman of AmCham China, said the two-year business outlook for China has improved, with U.S. companies showing increased optimism across the board, especially with regard to domestic market growth, estimated profitability and the economy.

"China is a vital market for many U.S. businesses. It is also an important source of talent and innovation that helps U.S. companies boost their global competitiveness," said Stein. "We hope the survey will inform policies on both sides of the Pacific Ocean and contribute to mutually beneficial relations between the two countries."

The survey revealed that about 77 percent of U.S. companies have no intention of relocating manufacturing or sourcing operations away from China.

Minister of Commerce Wang Wentao reiterated last week at a news conference in Beijing that the common interests of China and the U.S. in the areas of economy and trade far outweigh their disputes, and the two sides should strengthen dialogue and communication to help companies solve different issues in cooperation and explore potential.

Upbeat about the Chinese market, Johnson Controls International, a U.S. multinational conglomerate, established a joint venture with Tianjin Emagin Technology Co, a maglev high-speed rotating machinery manufacturer, in mid-January. "This cooperation is not only a new move for us to deepen our investment in China, but also highlights our determination to seize more growth opportunities in the country," said Anu Rathninde, president of Johnson Controls Asia-Pacific.