After continuing to reinvest in the world’s second-largest economy last year, American firms with a presence in China are among the foreign firms that intend to expand their existing operations and strive for additional market share in the coming years, even in the face of weakened confidence regarding the future of US-China relations, according to the latest survey results from a US business lobby.
The findings by the American Chamber of Commerce (AmCham) in southern China, released on Wednesday, highlighted the stubborn confidence issue and uncertainties surrounding bilateral trade tensions – concerns that Beijing moved to address last week with the unveiling of a new action plan.
The survey, conducted from October 11 to December 23, offered an annual assessment of the economic outlook and business sentiment among AmCham members in the southern region.
With an eye on the future, member companies said they had set aside US$14.59 billion from profits in China to reinvest over the next three to five years, looking to expand operations and capture additional market share. That total marks a 33.18 per cent surge from the previous reinvestment figure, and the report said “this considerable rise in allocated funds underscores a renewed confidence in China’s market potential”.
In all, 57 per cent of American firms said they reinvested in China last year, in line with the previous year’s total. Meanwhile, 43 per cent reported revenue growth in 2024, while 38 per cent experienced a decline.
Among all businesses surveyed, American firms accounted for 34 per cent of the total, while companies from mainland China accounted for one-quarter. Companies from Hong Kong or Macau made up 17 per cent, those from Europe comprised 14 per cent, and other countries rounded out the last 10 per cent.
Nearly 90 per cent of American firms reported profits last year in China, higher than 87 per cent for Chinese companies and 81 per cent for other companies.
Beijing has added a ban on fining private firms without a legal basis to the draft of its new private-economy promotion law
China has moved to ban authorities from imposing fines on private businesses without a legal basis in the latest draft of a new private-economy promotion law, as the country’s leaders step up efforts to boost confidence in the private sector and shore up economic growth.
The bill, which is designed to ensure private companies receive clear legal protections, is due to receive a second review by lawmakers at the ongoing National People’s Congress Standing Committee meeting. It is expected to be debated and potentially approved at next month’s meeting of China’s top legislature.
“No entity may impose fees on private businesses in violation of laws and regulations, levy fines without legal grounds, or force private enterprises to contribute assets,” the added provision states, according to state news agency Xinhua.
The move comes as Beijing steps up its drive to reassure the private sector, which has struggled to deal with years of crackdowns. The Chinese leadership is looking to private firms to help it boost economic growth, create jobs and drive innovation amid an escalating tech war with the United States.
Baseless fines have become a severe challenge for private companies in China over recent years, as some local authorities have turned to so-called “profit-driven policing” to boost their funds amid a fall in government revenues from land sales and other sources.
“In recent years, many local authorities have selectively fined private firms and conducted investigations that have seriously disrupted their operations,” said Peng Peng, executive chairman of the Guangdong Society of Reform, a Guangzhou-based think tank.