(Yicai) Feb. 2 -- Almost half of US companies in China expect to have made a profit last year thanks to the easing of Covid-19 restrictions and increased high-level governmental engagements, according to the findings of a survey by the American Chamber of Commerce.

Forty-nine percent of the survey’s respondents said they expect they were profitable in 2023, up from 44 percent a year earlier, the AmCham's China Business Climate report showed yesterday. Thirty-nine percent forecast a jump in revenue, an increase from 32 percent.

Twenty-nine percent expect to have realized higher earnings before interest and tax margin, up from 19 percent a year ago, while 42 percent anticipate a similar EBIT margin, and 68 percent predict the same or higher than their global average.

Half rank China among their top three global investment priorities, including 12 percent who operate exclusively in the country.

“China is a vital market for many American businesses,” said AmCham China Chairman Sean Stein. “It is also an important source of talent and innovation that helps American companies boost their global competitiveness.

The presence of American companies in China strengthens the US-China relationship and the economies of both countries, but the benefits go beyond trade figures and simple measures of profit and loss,” he noted.

Profit is expected by 51 percent of firms in the consumer sector, versus 36 percent a year earlier. Better or comparable EBIT margin is predicted by 67 percent, up from 47 percent, reflecting optimism and suggesting a gradual recovery in the business climate.

Forty-five percent of respondents in the resources and industrial field expect to have been profitable in China last year, compared with 41 percent a year ago, and 64 percent estimate their EBIT margin to have grown or been comparable with that in 2022, a gain from 61 percent. Seventy-one percent predicted their EBIT margin had surpassed or aligned with their global average, up 7 percent points. 

US companies expressed greater optimism about China-US relations this year, with nearly all of them regarding it as crucial to their business and about 30 percent expecting improvements in bilateral ties.

Forty-three percent are very confident or confident in China's commitment to further opening-up its market to foreign investment, climbing from 34 percent a year ago. US companies feel most optimistic about domestic market growth, profitability potential, and economic recovery.

Seventy-seven percent are not looking to outsource or relocate capacity from China. The services sector has the largest percentage that have decided against relocation. Those considering a move cite geopolitical tensions, risk management, and policy uncertainty as key factors, preferring developing Asia and the United States as alternative destinations.  

The China Business Climate report, conducted last October, involved half of AmCham China's members, including tens of thousands of individuals from almost 1,000 companies operating in the country.

Editor: Martin Kadiev