mandag 23. november 2020

U.S. companies with China operations look to the Asian giant for growth

For some American businesses, having an office in China may help them weather the impact of the coronavirus pandemic. According to S&P Global, S&P 500 earnings are set to fall more than 16% this year, compared to a year ago. That’s not even considering additional uncertainty from renewed restrictions on business activity as coronavirus cases continue to surge.Meanwhile, after shutting down more than half the country earlier this year to combat the pandemic, China was able to host a major auto show in Beijing by late September. China is now set to grow this year while the rest of the world contracts.

That disparity in economic recovery is giving multinational companies with China operations some pressure to carry more weight for the company overall. “Anecdotally, people are getting pressure from headquarters since the China economy (is recovering),” said Greg Gilligan, chairman of the Beijing-based American Chamber of Commerce in China. “They’re expected to carry a little more weight in the next fiscal year.”

IHS Markit conducted a survey of more than 6,600 companies in 12 countries in late October, and found that businesses in China reported the highest recovery rate, followed by those in the U.S.