London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

US companies are still betting on Chinese consumers, despite coronavirus impact

US companies are still betting on Chinese consumers, despite coronavirus impact

A survey of 119 companies from March 13 to 18 by the Beijing-based American Chamber of Commerce in China found that the proportion of respondents saying they are experiencing significant revenue declines increased to 50%, up from 28% last month.

The consumer industry was among the most pessimistic about the disease’s impact on market growth this year, with 38% of businesses in the sector expecting a decrease of at least 50%,

But the consumer sector had the highest proportion of businesses saying they would maintain previously planned investments -at 46% -and 8% saying they would increase planned investments, the survey found.

American companies in China are still betting on the local consumer, even if business disruptions from the coronavirus are dragging down revenues.

A survey of 119 companies from March 13 to 18 by the Beijing-based American Chamber of Commerce in China found that the proportion of respondents saying they are experiencing significant revenue declines increased to 50% — that’s up from 28% last month.

“The consumer sector as we see in this survey has been particularly hard hit,” Alan Beebe, AmCham China president, said on a call with reporters Wednesday morning. ”(It’s) the sector that had one of the largest revenue disruptions.”

“On the other hand, it’s the sector, along with technology, where investment plans really haven’t changed,” he said. “The way I interpret that is, while they’re taking a hit short term, there’s no fundamental change in outlook.”

Officially called COVID-19, the highly contagious disease that emerged in late December in the Chinese city of Wuhan, has spread rapidly across the globe in the last few weeks. As of Wednesday, the virus has killed more than 16,000 people worldwide, with China accounting for over 3,200 of those deaths. Governments in countries from Italy to the United States have called for people to stay at home and for non-essential businesses to close.

The shutdowns have spurred fears of a global recession, sending financial markets worldwide churning.

Operating earnings per share for the S&P 500 are expected to grow just 0.2% this year, with that of consumer discretionary falling 1.3%, according to a March 20 note from Sam Stovall, chief investment strategist at CFRA.

Many companies, especially those in the consumer discretionary sector — which provide nonessential goods and services such as cars, apparel and entertainment — have mentioned “coronavirus” or “COVID-19″ on their quarterly earnings calls, according to analysis from FactSet, published March 20.

The report by Senior Earnings Analyst John Butters said that for the 213 companies in the S&P 500 that discussed those two terms, their average revenue exposure to China is 6%.

When the coronavirus first broke out in China, businesses were most concerned about disruptions to global supply chains and growth in the world’s second-largest economy. The acceleration of the outbreak overseas has shifted worries to global growth, even as China and its hundreds of millions of consumers get back to work.

“Now that we’re in a global pandemic situation, demand for our member companies’ products and services has changed significantly, somewhat for reasons of supply chain, but others, really just consumer demand,” Greg Gilligan, AmCham chairman, said on CNBC’s “Squawk Box Asia” Wednesday.

He said members are planning to cut costs, revise budgets and change projections for the year, but have not yet adjusted or reduced staff.

An increased proportion of respondents in March said demand for their products fell — 39% of firms versus 22% in February.

On the supply chain side, AmCham members were less affected by the relatively slower resumption of work for small and medium-sized firms. The survey found that nearly two-thirds of respondents said these smaller businesses accounted for no more than a quarter of their supply chain, while only 11% have a strong reliance.


Consumer businesses still planning to invest


The chamber’s annual business conditions survey late last year found the consumer sector was one of the industries more optimistic about their market opportunity in China for 2020, given the country’s large and growing middle class.

In last week’s flash survey of members, the consumer, as well as resources and industrial industries, were the most pessimistic about the virus’ impact on market growth this year, with 38% of firms in both industries expecting a decrease of at least 50%.

But the consumer sector had the highest proportion of businesses saying they would maintain previously planned investments — at 46%, while 8% said they would increase planned investments, the survey found.

The services sector was the only other industry to report businesses planning to increase investments, also at 8%, while the technology industry had the second-highest proportion of businesses maintaining investments — at 43%.

Foreign direct investment in China plunged 25.6% in February, bringing the total for the first two months of the year to 134.4 billion yuan ($19.2 billion), a decline of 8.6% year-over-year in yuan terms, according to China’s Ministry of Commerce.

For AmCham members overall, 40% said in the latest survey they would maintain previously planned levels of investment, up from 23% last month. Only 2% said they would consider exiting the Chinese market in the next three to five years, the March survey found.

“This indicates both patience and confidence that eventually business will return back to normal in China and this wouldn’t lead to any abrupt changes in long term strategy,” Beebe said.

Slightly more than a fifth of respondents are already back at work, with 13% expecting to resume normal operations by the end of this month, and 23% by the end of April, the survey found.

When it comes to government support, the top ask is tax alleviation, followed by consistency of policy and travel restrictions across different regions of China, according to the survey.

Based on the survey results, AmCham’s chairman Gilligan was also optimistic that pressure from the coronavirus would give China further impetus to follow through on reforms to the business environment.

Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×