上海美国商会-2020年9-10月洞察月刊（英文）-2020.9-32页_9mb

2020 China Business Report Summary

Core Content

The 2020 China Business Report, published by the American Chamber of Commerce in Shanghai (AmCham Shanghai), provides insights into the performance, challenges, and future outlook of US businesses operating in China. It reflects the views of 346 member companies and includes data on revenue impact, investment trends, regulatory environment, and competitive dynamics in the Chinese market.

Main Trends and Insights

Revenue Impact of COVID-19

• 78% of respondents reported that their 2020 revenues were negatively impacted by the pandemic.
• 24% of respondents said expected revenues had decreased by more than 20%.
• The automotive industry was the most affected, with 95.7% of companies reporting negative revenue impact.
• Logistics, transportation, warehousing, and distribution saw the most positive impact, with 50% of respondents reporting revenue gains.
• Technology hardware, software, and services, retail and consumer, and agriculture and food also reported positive impacts (each at 33.3%).

Five-Year Outlook

• 18.5% of companies had a pessimistic five-year outlook in 2020, compared to 21.1% in 2019.
• 71.2% of companies with global turnover over $5 billion were optimistic, versus 54.3% of those with global turnover of $101–500 million.

Production Shifts

• 70.6% of companies with manufacturing operations in China did not intend to shift production out.
• 14% are moving some production to non-US locations, and 7% are moving some domestically and partially outside.
• Only 3.7% are moving production to the US or its territories, despite calls from the Trump administration.

Chinese Competitors

• Most companies still report being outpaced by Chinese competitors in bringing products to market.
• The gap is narrowing: 64.2% of companies said their competitors were swifter to market, down from 69.4% in 2019.
• 25.9% of companies said their Chinese competitors were on equal footing with them.
• In product development and product quality, 71.4% and 85.7% of respondents respectively said Chinese competitors were less advanced.

Investment Priorities

• Sales, marketing, and development was the top investment priority (33.8%).
• Research and development followed (25.7%).
• Retail and consumer companies increased e-commerce and digital investment to 48.8%, while service providers saw a 13 pp drop in such investment to 11.5%.

Regulatory Environment

• 35.3% of respondents believe Chinese policies and regulations toward foreign companies have improved.
• Retail saw the largest increase in positive sentiment, with 46.3% noting improvements (up 6.1 pp from 2019).
• 40.4% of service sector companies also reported improvements (up 6.1 pp), but the sector was the most negative with 29.8% reporting a worsened regulatory environment.
• Education and training was the most opaque sector, with 88.8% of respondents finding it lacking in transparency.
• The Foreign Investment Law (FIL) was cited as a policy reform that may have contributed to improved sentiment in some sectors.

Key Takeaways

• Despite the pandemic and trade tensions, China remains a critical market for US companies.
• Capacity utilization dropped across all sectors, but agriculture and food, non-consumer electronics, and pharmaceuticals saw increases.
• Douyin is a major platform for reaching Chinese consumers, with 400 million active users as of January 2020.
• Hybrid education models are becoming standard, with live and recorded lessons now being a common approach.
• Outplacement services are used to support employees during transitions, with Cornerstone offering tailored programs for different levels.

Additional Sections

• Member News: Features insights from Juju Wang, chair of the Art and Culture Committee, and highlights AmCham's Social Impact Award winner.
• Policy: Explores China's Permanent Residency Card and its implications for foreign workers.
• Outplacement: Offers career transition coaching to help employees transition with dignity.
• Contact Information: Includes Simon Wan, AmCham Shanghai's CEO, and contact details for further inquiries.

Conclusion

The report underscores the resilience of US businesses in China, despite the challenges posed by the pandemic and regulatory uncertainties. It also highlights the importance of adapting to new trends, such as e-commerce and digital marketing, and the value of localizing strategies to effectively engage Chinese consumers.