Illustration: Chen Xia/GT
A recent survey by the American Chamber of Commerce in China has drawn widespread attention for its revealing findings. The survey shows that no American company operating in China has chosen to relocate production back to the US. Instead, these firms are either localizing their operations in China or shifting some production to third countries. After a poll of 112 member companies in China, the results – emerging against a backdrop of sustained China-US trade tensions and heightened tariff barriers – should give pause for thought.
Since the US government designated China as a “primary strategic competitor” and implemented policies aimed at “decoupling and severing supply chains,” relations between the two countries have deteriorated considerably. As direct participants and stakeholders, American companies with operations in China are the most qualified to evaluate US strategy toward China. By choosing to remain in the Chinese market, they have cast a vote of confidence in China-US economic relations. This choice is underpinned by profound business logic and strategic considerations.
As the world’s second-largest economy with a population of 1.4 billion, China’s market scale and growth potential are irreplaceable. China represents a substantial production base and a crucial consumer market for many US businesses. The resilience and vitality of China’s economy and its expanding middle-income population offer American companies vast growth opportunities. Abandoning this market would mean forfeiting a critical engine for future expansion.
China’s comprehensive and efficient industrial supply chain ecosystem constitutes a unique competitive advantage. After decades of development, China has established complete upstream and downstream industrial chains supported by a skilled industrial workforce and advanced infrastructure. The integrity and efficiency of this ecosystem are difficult to replicate globally. As numerous corporate executives have noted, relocating production out of China would be prohibitively expensive and technically and operationally challenging.
American companies’ decisions reflect an acknowledgment of the deeply integrated nature of China-US economic ties. Attempts to artificially sever these connections would result in financial losses for both sides and disrupt global supply chain stability, ultimately harming global economic growth. The pragmatic approach of American businesses reflects their understanding that economic globalization is an irreversible historical trend, and any attempt to reverse this trend comes at a high cost.
As the world’s two largest economies, the US and China bear significant responsibility for driving global economic recovery and maintaining the stability of global supply chains. Establishing stable and predictable financial and trade relations serves the interests of both peoples and meets the expectations of the international community.
Indeed, corporate choices do not signify that risks have been eliminated. Uncertainties in future China-US relations persist, with policy environments, geopolitical situations and other factors potentially influencing multinational companies’ strategic planning. The outcome depends on the policy choices made by both governments to follow the consensus of their leaders and on whether they can maintain dialogue and consultation.
The actions of American companies demonstrate that economic rationality is prevailing and supports strategic patience. Their confidence in the Chinese economy, expectations for China-US cooperation and belief that economic logic will ultimately triumph are all reflected in their decision not to withdraw.
As long as channels for cooperation remain open and dialogue mechanisms continue to advance, a rational division of labor and shared development between the US and China within global supply chains will remain the prevailing trend.