A growing number of US companies operating in China say they plan to move their business out of the country according to a recent survey by the American Chamber of Commerce in China.
The organization’s annual business climate survey report found that 25 percent of respondents have either moved or are planning to move capacity outside of China. While half of respondents are moving capacity to “Developing Asia,” 40 percent say they are moving capacity to the US, Canada or Mexico.
77 percent of its 496 respondents reported feeling “less welcome” in China last year, a huge jump from 47 percent in 2014.
Businesses reported that labor costs, regulatory challenges and the threat of IP theft were the main reasons promoting US businesses to pack up shop in China.
Furthermore, 25 percent of businesses represented by respondents had already left China within the last three years, with rising labor costs being the most common complaint, while nearly 1 in 10 are being compelled to flee “regulatory challenges.”
45 percent reported flat or declining business revenue, with only 64 percent enjoying a profit, the lowest percentage found by the survey in five years.
The results of the survey come as China’s National Bureau of Statistics reports its slowest rate of growth in 25 years, coming in at 6.9 percent.
Speaking to AFP, the Chamber’s Vice-Chairman Lester Ross said, “Some of the policies which are being considered or have already been enacted are fundamentally leading China in the wrong direction.”