US firms plan to expand in China, in rejection of Washington's decoupling push

Washington's toxic policy fails to decouple, but still poses risks

China US (Photo/GT)

Despite the US government's apparent push for a China-US economic decoupling, a majority of the top 500 US companies plans to increase investment in China, according to a latest survey, underscoring the massive US business interests in the Chinese market and the failure of Washington's toxic China policies.

Of the 41 surveyed US companies that adjusted their business in China, 28 chose to increase investment, taking up a significant 68 percent, while only 10 reduced investment, according to the survey released by the Center for China & Globalization (CCG), a Beijing-based think tank, over the weekend.

The figures are a reflection of the fact that, given China's significant advantages in industrial output, supply chain and market opportunities, there is a very little possibility for the US to be able to decouple from China and build a manufacturing sector by itself, experts said.

The report's findings were also on display at the 2021 China International Fair for Trade in Services (CIFTIS), which began last Thursday and ends on Tuesday, with representatives from 153 countries and regions participating, five more than during the previous session. US companies, which make up one of the most active groups of participants, showed greater momentum in presenting their products to the Chinese audience.

In its second time attending the CIFTIS, US chip giant Qualcomm exhibited its latest 5G, artificial intelligence, extended reality and high-definition image technologies with Chinese industrial partners as part of a joint promotion of the development of the digital economy and globalization.

Alex Rogers, president of Qualcomm technology licensing and global affairs, and several other vice presidents of the company participated in online and on-site events of the CIFTIS.

Qualcomm's active participation in the CIFTIS as a multinational company fully demonstrates its determination to remain rooted in China and to promote the future development of digital services in China and around the world through cutting-edge exploration and open cooperation, according to the company.

Qualcomm representatives also discussed how to actively participate in the development of China's open and innovative economy at a higher level under China's "dual circulation" development paradigm.

Other US multinational companies also expressed their interests at the event to make further investments or expand their presence in the booming Chinese market.

In 2020, despite the epidemic and trade friction, direct investment from the US into China reached $123.88 billion, a record high, according to Statista, a German company specializing in market and consumer data.

That shows that business or investment activities should be treated differently and not politicized, He Weiwen, a former senior trade official and an executive council member of the China Society for World Trade Organization Studies, told the Global Times on Sunday.

He said that China-US trade is highly likely to break records this year and exceed the period before the trade dispute.

While US companies are strengthening their investment in China, there are also rising uncertainties posed by the US government that continue to cast a shadow over the normalization of business operations.

Changing China-US relations have had a certain impact on the business of large multinationals in China. In particular, US' punitive tariffs have increased the procurement costs for some US companies in China, according to the CCG's report.

More than half of multinationals are adopting a wait-and-see approach while maintaining their operations in China.

Similar findings came in a survey released by the American Chamber of Commerce in China, the AmCham Shanghai and Pricewaterhousecoopers last year. That report showed that China-US trade disputes had affected the supply chains of 90 percent of US companies.

If the China-US science and technology sector is "decoupled", it will be even worse for the development of the US technology industry, industry insiders said.

According to data, 94 of the 121 US top 500 companies have done business in China so far since 2018. Among them, 21 out of the 28 companies that are classified as high-tech enterprises are adjusting their operations in China, reflecting the fact that tech companies have been hit harder by the uncertainty.

The biggest risk for US companies doing business in China is the deterioration of China-US relations, He said, noting that the future of the bilateral relationship is so far unpredictable.