The @USChinaBusiness Council has just published a survey of its members!

Surveys like this matter partly because individual companies don't speak out. (They're scared of retaliation.)

They're one of the few ways we have to see how the Phase 1 trade deal is working.

You can read the report here:

https://www.uschina.org/sites/default/files/uscbc_member_survey_2020.pdf

Before sharing the results, I should say that unless the methodology has changed, unless specified the survey is an unweighted compilation of ALL responses. And there may be multiple responses from the same company.

(This could give more weight to bigger companies.)

Also, USCBC members may not be representative of all US companies with operations in China. They could be PARTICULARLY committed to the market.

So take questions about moving operations out of China with a pinch of salt. (Those who have left probs won't respond to the survey...)

With that out of the way...

turns out, companies are more positive about the Phase 1 deal than they are about its implementation...

Or in gif-speak:

The main reason they like the deal doesn't seem to be that it gives them lots of amaaaazing market access.

Instead, it means that relations shouldn't get WORSE.

Trump administration: WE FOUGHT A TRADE WAR FOR YOU. WE PUT ALL THESE TARIFFS ON FOR YOUR BENEFIT. BECAUSE YOU WERE BEING TREATED UNFAIRLY.

American companies: um... thanks? but also no thanks?

One of the biggest problems in the US-China relationship is ENFORCEMENT.

You can agree on whatever lovely trade rules you want, but governments can only fix problems they KNOW about. If companies are too afraid to come forward with problems, then... problems will go unfixed.

The Phase 1 deal is supposed to include a dispute resolution mechanism, where companies tell the govt about problems.

But... only 16% of respondents say they're likely to use it.

WHY?
- unsure how concerns would be rectified
- fear of Chinese retaliation
- company privacy

The survey asks about the impact of the US-China trade tensions.

Turns out more respondents mentioned UNCERTAINTY than lost sales due to the tariffs themselves.

(too many charts - needed a gif break)

This chart underlies one of the Chinese retorts to American complaints about unfair treatment...

"...are you making money? ok then."

There are signs of disrupted investments.

24% of respondents said that their company reduced or stopped planned investment in China in the past year, compared to 17% last year.

(41% give Covid as the reason, compared to 52% who mention US-China tensions)

34% of respondents report accelerated preferential policy support for domestic private and state-owned companies

was... that the plan or... hmm

Though interestingly there does seems to be an increase in the share of respondents saying that their competitors are NOT receiving benefits of subsidies.

This would be consistent with a concentration of support in some sectors. (Or weird survey selection effects.)

(another gif break)

well THIS is awkward

From the report: "13% of respondent companies have been asked to transfer technology this year, compared to 5% last year. The reason for this uptick is unclear."

...though the share of respondents reporting that China's IP protection has improved over the last decade has increased...

In summary...