Survey: China critical for US businesses

Despite the decoupling rhetoric of China hawks in the United States, China remains critical for US businesses, as the country's vast market size, growing role as an innovation hub and resilient supply chains help US companies sharpen their global competitiveness, said experts and executives.

Amid signs of positive development in bilateral economic ties, experts said that if Beijing and Washington manage their differences and find more common ground, it would serve the interests of business communities on both sides.

Their comments came after an annual member survey conducted by the US-China Business Council found that 95 percent of respondents consider China "somewhat to very important" for staying globally competitive.

"For US companies, China is not optional," the council said, summarizing the survey report released on Wednesday.

President of the US-China Business Council Sean Stein said the results are clear. "Despite the challenges, competing in China is a prerequisite for many American companies to compete globally."

The survey report emphasized that US businesses are "not leaving China", as the Chinese market remains important "not only for scale but also for being a multifaceted source of global competitiveness".

The survey found that almost half of US companies apply the experience they gain through their China operations to other markets.

It noted that China has become like a "boxing gym" for Western companies, as competing with Chinese companies hones their skills and makes them more insightful.

Liu Ying, a researcher at Renmin University of China's Chongyang Institute for Financial Studies, said that China and the US are now competing in many high-value industries. "That does not mean cooperation is impossible, but it requires a much more sophisticated approach than the simple complementary model of the past."

Last month, the two countries agreed to establish trade and investment councils — intergovernmental cooperation platforms that will provide ground for resolving disputes before they escalate, and help foster a more stable and predictable environment for businesses in both markets.

The Chinese Ministry of Commerce said that through the trade council, the two nations would discuss issues such as tariff reductions on specific products, and that they have agreed in principle to lower tariffs on products of an equivalent scale worth $30 billion or more on each side.

Zhu Min, former deputy managing director of the International Monetary Fund, said that differences between China and the US are inevitable, but so is cooperation.

"Through a constructive approach, one that uses expanding cooperation to manage differences, both nations and their peoples stand to benefit; and so does the world," he said. "We need to keep lengthening the list of cooperation items while shortening the list of differences."

At the China International Supply Chain Expo, which will open later this month in Beijing, US companies and institutions are expected to rank first among foreign exhibitors for the fourth consecutive year, as they continue to seek industrial and supply chain cooperation with Chinese firms, according to the China Council for the Promotion of International Trade.

Henry Ding, president of 3M China, said that China is the largest overseas market for US industrial conglomerate 3M, and the company remains confident in the broad opportunities created by China's high-quality development.

In recent years, 3M has accelerated the localization of its full value chain in China, spanning research and development, testing and manufacturing. "Today, more than 50 percent of the products 3M sells in China are manufactured locally," Ding said.

"This year, 3M China will continue to increase its local R&D investment and plans to achieve more than 30 percent growth in new product launches compared with 2025, significantly outpacing other global markets," he added.

That said, the survey still pointed to "fragile US-China relations, China's economy and entrenched tariffs" as the top challenges for US companies operating in China.

"US-China relations remain companies' greatest challenge in the China market, and despite the truce, both governments continue to release new economic security policies," the business council said.

As the two countries set the agendas for the trade and investment councils, Stein said the results of this year's survey should serve as a "wake-up call" for policymakers in both countries. "We have a real opportunity to make progress on more than just tariff reductions," he added.