MNI POLICY: US Businesses In China Cautious On Trade Talks

By Iris Ouyang

     BEIJING (MNI) - American businesses in China remain cautious ahead of a

potential trade deal between China and the U.S., seeing it as uncertain that

Beijing will move quickly to make structural economic changes demanded by

Washington, the president of the American Chamber of Commerce in China told MNI

in an interview.

     While President Donald Trump's decision to suspend a planned tariff

increase on Chinese imports was a relief to U.S. businesses in China, more

difficult issues remain unresolved, Alan Beebe said.

     "There's a slight difference between optimism and hope," Beebe said. "I

would say there's growing hope," rather than optimism, he said.

     Beebe's cautious outlook echoed comments by Chinese observers and

economists who have told MNI that China is likely to limit its concessions to

the U.S. on structural reforms such as reducing subsidies for state-owned

enterprises.

     About 75% of respondents to the chamber's 2019 China Business Climate

Survey Report expect bilateral relations to worsen or stay the same this year.

Some 32% predicted slowing investment in China, compared with 26% last year.

About 52% of resource and industrial corporations said they are outsourcing

components or assembly outside of China, and 30% of technology companies are

doing the same.

     The survey, conducted from Nov. 13-Dec. 16, showed tariffs imposed by both

sides increased manufacturing costs and sale prices while decreasing demand for

American companies in China.

     Some 12% of respondents reported that revenue dropped last year versus 7%

in 2017.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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