US companies' profits in China reach historic lows

Amidst tensions between the United States and China, U.S. companies have experienced a drastic drop in profits in Beijing, reaching historically low levels last year. A report released by the American Chamber of Commerce (AmCham) in Shanghai revealed that only 66% of U.S. companies in the Asian country were profitable in 2023, the lowest level recorded in the survey's 20-year history.

Business confidence is also at an all-time low, with only 47% of those surveyed saying they were optimistic about their business prospects in China the next five years.

25% of companies reduced their investments in China

The report revealed that 25% of companies reduced their investments in China this year. Many are doing business in other regions such as Vietnam, Malaysia and South Asia. Only 37% of respondents expect their revenues in China to grow at a faster rate than in other global markets.

The main reasons are "the perceived risks of doing business in China have increased significantly" and "at the same time, the market is slowing down, with soft demand and overcapacity," Eric Zheng, president of AmCham Shanghai, said in a news conference.