On June 20, the China General Chamber of Commerce-USA (CGCC) and CGCC Foundation released 2018 Business Survey Report on Chinese Enterprises in the U.S. in Washington D.C. The comprehensive research report brings issues about investment strategies, management and challenges related to Chinese investment in the U.S. into the spotlight. Over 200 American and Chinese executives from CGCC member companies, distinguished scholars and experts gathered together.
Mr. Xu Chen, Chairman of CGCC and President and CEO of Bank of China USA, delivered welcome remarks. He mentioned that despite a slowdown of new Chinese investments into the US in 2017, Chinese operations continue to expand their businesses in the United States. He emphasized that the goal of CGCC is always to provide access to accurate and up-to-date information for parties at every level of government and business, such as the data in this survey report. It is only through direct communication and mutual trust that the two countries can resolve tensions and pursue common ground.
Sam Knox, managing director of Institutional Investor Custom Research Lab and collaborator on the survey report, presented key findings of the survey report. The survey report suggests that Chinese companies invest in the US with an effort to engage fully with the global economy. Chinese investors prefer the greenfield/new entity strategy to start a business in the US to ensure control of the investment and capture benefits provided by state and local governments. While as they expand business, M&A is the most commonly used overall strategy – as much as 90% of Chinese capital invested in the US. CGCC member companies are active participants in local communities, with over 70% of the respondents reporting having corporate social responsibility programs at their US companies. CGCC members employ an estimated number of 200,000 people in the US, and nearly 60% of survey respondents say headcount rose in 2017. The same percentage expect to increase their workforce in the next two years.
A panel discussion entitled “Chinese Investment in the US: The Path Forward” following the presentation provided unique insights along with best practices for both U.S. and Chinese businesses operating in the U.S., led by Michael McDonough, chief economist at Bloomberg. The panelists included Daniel McQuade, Group President of Construction Services of AECOM; Steven Tan, President of China Telecom Americas; Shau Zhang, Partner and Market Leader of EY Americas COIN (The China Overseas Investment Network); and Jeff Zhao, Vice President of BWI (Beijing West Industries) Group. The panelists shared their thoughts with the audience regarding the survey report and experience with the U.S. market for Chinese companies. The panel covered various topics from local employment, greenfield strategies, building trust between Chinese and US companies to the recent US policy environment and influences of trade tensions on their businesses. Panelists discussed difficulties of hiring talents and the importance of bridging the two cultures when Chinese companies expand businesses in the US. Whereas they expressed concern for the recent slowdown in China’s investment overseas, they are confident about the future bilateral relationship in a long term.
The Annual Business Survey Report has been conducted by CGCC for five consecutive years. This year, more than 700 questionnaires were distributed and 249 effective responses were collected. The survey findings were supplemented with in-depth interviews and commentary from senior executives at CGCC Chinese member companies, including Bank of China USA, China Telecom Americas, Fosun International, Fuyao Glass America, International Vitamin Corporation, Jushi USA, Mindray North America, PetroChina International America, and Xinchao Energy. The survey has yielded insightful findings and provided an insider perspective on up-to-date information about Chinese companies’ operations in the U.S. and their views regarding the U.S. investment environment.
As reflected in the survey report, against the backdrop of intense China-US trade relations, Chinese companies are raising their awareness and cautions of issues of high tariffs on imports and tighter work visa and immigration policies, in addition to regulatory compliance and stricter scrutiny of Chinese FDI by CFIUS (Committee on Foreign Investment in the United States). Despite the escalating tensions between China and the US, Chinese companies continue to show faith in the U.S. market and would not change their investment plans. At the same time, they also express the desire for enhanced communication channels between China and US governments and between Chinese businesses in the US and the US government. CGCC hopes that the results of this survey will help policymakers from both governments focus on the big picture and seek common ground that will be beneficial to both the Chinese and US business communities.
China Daily 中国日报
South China Morning Post 南华早报
Xinhua Net 新华社
Beijing Business Today北京商报
Chongyang Institute for Financial Studies, Renmin University of China人大重阳网