Chinese and U.S. flags flutter near The Bund, before U.S. trade delegation meet their Chinese counterparts for talks in Shanghai, China July 30, 2019.
Aly Song | Reuters
BEIJING — More U.S. companies are finding it harder to make money in China than before the pandemic, raising concerns that businesses may not stay long.
According to an annual survey released Thursday by the American Chamber of Commerce in China, 19% of member companies surveyed in 2023 said their earnings margins, before interest and taxes, were higher in China than they were globally.
That’s up from 12% in 2022, when many businesses were subject to stringent Covid-19 controls in China.
But the figures are well below the 22% to 26% share of U.S. companies that said margins were higher in China than they were globally in prior years from 2017 to 2021.
“It is concerning when our member companies are not profitable,” Michael Hart, AmCham China president, told reporters Thursday. “They will not stay long if they are not profitable.”
“This is a wake-up call for the Chinese government,” he said.
China’s economy grew rapidly over the last few decades to become the second-largest in the world behind the U.S.
But China’s growth has slowed in recent years due to the three-year pandemic, a slump in the massive real estate market and a drop in exports.
The slowdown and corresponding declines in domestic sentiment have prompted calls for Beijing to stimulate the economy further. While authorities have announced a slew of measures to support growth, it’s unclear whether there’s interest in large-scale stimulus as China tries to transition away from reliance on real estate to other industries.
You don’t come to China to break even, so we’d like to see more of our members profitable
Michael Hart
AmCham China, president
The AmCham China survey found that 49% of members said profit margins in China last year were comparable to those globally, up one percentage point from 2022 and the same as reported in 2019.
One-third of…
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