World

China’s Slowdown Is a Greater Threat Than the Trade War

As the The Chinese consumer market attracted several US Companies that were consistently hopeful of opportunities in China. The recent China-based American Companies are apprehensive of slow economic growth in China. This could be due to the additional trade war tension between China and the USA. Well, this China’s slowdown will cause major threat than the prevailing trade war between the US and China.

Flourishing Businesses: 

Over the past years, American Companies expanded China-based business in Shanghai. Amcham was founded with 3,000 members representing 1,500 Companies. These include Citigroup Inc., Duke University, FedEx Corp., Thermo Fisher Scientific Inc., Walt Disney Co., and Wells Fargo & Co. The company Amcham is currently facing is hard time because of China’s slowdown.

“Fears of repercussions from the Chinese government including non-tariff barriers such as increased regulatory scrutiny or inclusion on the anticipated unreliable entity list, may explain the decline, as could tariffs”, Said by Amcham Officials.

China’s Slowdown Report on the Recent Annual Survey:

For the past 5 years, the business prospects seem to be in promising sign that leads about 61% new business establishment in China. Even in 2018, the revenue growth of the China’s economy was over 80%. However, now in 2019 China’s slowdown drops its economy declined sharply.

Only quarter (333 members) responded to Amcham’s June-July 2019 survey. This reflects members are uncomfortable in answering questions with political tension between Washington and Beijing. As 66 % of members pointing that US-China trade war would continue a year. In addition to that, about 17% of those 66 % claimed it would continue indefinitely.

Annual Survey of The American Chamber of Commerce

On Wednesday (10th September 2019), the American Chamber of Commerce in Shanghai released the latest annual survey. In that report, about 51% of businesses-owners claimed reducing revenues for investing in China-based Companies. Most American Companies are downshifting in China and cutting jobs.

Responding members (58% in 2019; 1/3 in previous years) claimed 3-5 years of the slow Chinese economy was challenging. Also they (18% in 2019/3x from previous years) would likely to cut investments in China. In addition to that, official members also (53% in 2019) mentioned their tariffs have caused them to slow down in investment spending. Because of these facts, it clearly display the China’s slowdown and it potential treat to international community.