US-China Tensions Hit American Companies' Profits in China

American firms in China face record-low profits amid US-China tensions and a slowing Chinese economy. Only 66% of surveyed companies were profitable in 2023, with 47% optimistic for the next five years. Geopolitical tensions and economic slowdown are major challenges, pushing firms to divert investments to other regions.

American businesses operating in China are experiencing historically low profits, with confidence plummeting as US-China relations remain strained and the Chinese economy slows down, according to a report released Thursday by a US business group.

The American Chamber of Commerce in Shanghai's report revealed that out of 306 companies surveyed, only 66% were profitable in 2023, marking a record low. Additionally, only 47% of respondents held an optimistic outlook for their business prospects in China over the next five years, the lowest in the survey's 20-plus-year history.

Ongoing geopolitical tensions between Beijing and Washington over issues such as trade, manufacturing, and territorial claims in the South China Sea are cited as the top challenge for businesses in China. Domestic economic issues, including weak consumer demand and deflationary pressures, further complicate the business environment.

(With inputs from agencies.)