Chinese firms hold steady on US market

After rocky 2020, businesses maintain long-term view despite strains, poll finds

Chinese companies operating in the United States are trying to look on the bright side for their prospects in the key market after a bruising 2020 in which their businesses were buffeted by the COVID-19 outbreak and souring US-China relations.

Some 83 percent of Chinese companies surveyed said they expect their new business investment in the US to remain the same or increase this year, according to the 2021 Annual Business Survey Report on Chinese Enterprise in the US, conducted by the China General Chamber of Commerce, or CGCC, in the US.

"Despite serious challenges in 2020, Chinese companies continue to view the US market as an investment priority and remain committed to it for the long term," said Abby Li, director of research at the CGCC.

Li said nearly 200 Chinese companies operating in the US, spanning 11 industrial sectors from 40 states, shared details of their experiences and sentiment in 2020.

Only 27 percent of the companies found the current US business environment to be satisfactory or very satisfactory－compared with 41 percent in 2020. The highest degree of satisfaction was in 2015, the first year that the survey was carried out, at 61 percent.

However, there is more optimism among Chinese companies for the likelihood of better US-China relations and economic cooperation down the road. For this year, 39 percent of the surveyed companies said they expect a moderate to substantial improvement in bilateral relations, compared with 33 percent taking that view in 2020.

The survey gave an insight into the hit to profitability caused by the pandemic. Some 81 percent of the Chinese companies polled indicated that their profits suffered last year. However, the survey also identified some positive developments in specific industries, especially healthcare and energy.

"It was partially due to the nature of the business, but more importantly, the responsiveness and flexibility to identify opportunities during crisis," Li said.

"Another interesting observation from the survey indicated that despite the detrimental effects of the pandemic, COVID-19 has actually catalyzed many companies to make positive, long lasting changes."

About 56 percent of respondents said they have enhanced their companies' capabilities to identify and manage emerging risks, followed by increased investment in digital transformation, product innovation and customer engagement.

Looking ahead, improving profitability and growing existing business remain the primary objective for 73 percent of the surveyed companies, Li said.

"We also noticed that companies are additionally focusing on entering new markets, obtaining brand recognition and streamlining existing businesses," she said.

Brand building is another major focus for Chinese companies. "It has been widely acknowledged that the gap between how the US market and the consumers perceive Chinese brands, and how they view successful global brands, is present," Li said.

Valuable tool

Xiao Yuqiang, vice-chairman of the CGCC and chairman of the US management committee of Industrial and Commercial Bank of China, said he hopes that the survey will continue to act as a valuable tool for businesses and policymakers in the US and China to better understand the positions of Chinese investors in the US.

"CGCC will remain committed to carrying on constructive engagement and dialogues, building bridges, and serving as synergy to encourage better understanding and cooperation between US and Chinese business communities," Xiao said.

Guan Linhua, chief executive of Surge Energy America, said his company was an example of how Chinese companies are contributing to the US.

Surge, an oil producer headquartered in Houston, Texas, was founded by capital from China in 2015. "The company has grown from a small company to one of the largest oil producers in Texas, a state that produced about half the US crude oil production," Guan said. Last week, Surge Energy celebrated the first 100 million barrels of oil it has produced since its operation started.

Guan said Surge had generated $1 billion in wealth in the US, by the first quarter of this year, in the form of royalties and taxes. This year that translates into $1 million a day, on average. "So, we're proud of what we do here in the US as a Chinese-owned enterprise," he said.

Jing Shiyan in Kansas contributed to this story.