Tensions between Beijing and Washington are the biggest worry for US companies in China, report says

Simmering tensions between Beijing and Washington remain the top worry for American companies operating in China, according to a report by the American Chamber of Commerce in China released Tuesday.

The survey of U.S. companies said inconsistent and unclear policies and enforcement, rising labor costs and data security issues were other top concerns. It also said that, despite the insistence of Chinese leaders that Beijing welcomes foreign businesses, many still are hindered from free competition.

“The Chinese government has stated that it encourages foreign direct investment, but many of our members continue to encounter barriers to investment and operations including policies that discriminate against them and public relations campaigns that create suspicion of foreigners,” the report said.

The report welcomed an improvement in relations in 2023 that was capped by summit meetings of Chinese leader Xi Jinping and President Joe Biden, but said the U.S. presidential election in November was “looming large” over the future business environment.

More recently, U.S. Treasury Secretary Janet Yellen visited Beijing, where she raised concerns that potential overcapacity in Chinese industries — such as electric vehicles, steel making and solar panels — might crowd out U.S. and other foreign manufacturers.

“We recognize that there are significant areas of contention in the U.S.-China relationship, many of which have no easy or short-term prospects for resolution,” it said.

The report said the Chamber saw high-level exchanges and communication between the two sides as a top priority.

American companies operating in China saw improved profits last year, though slightly less than half expect to be profitable in 2024.

Still, many