Real estate has been used by the CCP to inflate and manipulate its GDP resulting in unyieldy real estate debt and ghost cities sprinkling the communist nation's landscape. That house of cards collapsed in 2023, and in 2024 all indications are that a similar fate will soon meet China's industrial sector. American companies in the country see the writing on the wall and most are curtailing or cutting future investments, and nearly 39% say they are being mistreated relative to their Chinese counterparts. China's collapse is the biggest story impacting Southeast Asia that few are openly discussing.
According to an American Chamber of Commerce in China survey nearly half of the polled 343 American firms have no plans to expand investments in China or were intending to cut investment forecasts. Nearly one-third cited uncertainty in the US-China economic relationship as the primary reason behind their reduced investment plans. 37% anticipate only a minor investment increase, leaving only around 20% still eager to plow money into China.
"Despite the expansion in bilateral trade in recent years, mistrust between the United States and China remains high, and relations are strained," said AmCham China Chair Sean Stein.
Making matters worse, the bulk of this data was collected in October, ahead of the November meeting between Joe Biden and President Xi Jinping at the Asia-Pacific Economic Cooperation summit in San Francisco. The situation has deteriorated significantly since then so the sentiment is likely even worse now. Relations are about the same, what's worse is the tumult in the seas making long-haul shipments more complex, and that China's economy appears worse now than it did then.
It's not just geopolitical tensions that are impacting investor sentiment. China's economic landscape is rapidly deteriorating with real estate suffering a dismal 2023, and cracks in the industrial sector are showing indicating another bumpy year in 2024 for the communist nation. One-third of American companies in the survey additionally said they were treated unfairly compared to Chinese competitors and counterparts. 39% said China is less welcoming to American businesses now than it once was.
A similar survey from the British Chamber of Commerce in China in December found UK businesses also reticent to pony up more cash for Chinese investments. 60% of the Brits believed a slowing Chinese economy was even a bigger hindrance to investment than the strict and draconian lockdowns the authoritarian government imposed on its people not so long ago. High-profile office raids, and cash-strapped governments unable to offer new incentives, were other factors deterring British investments.
