Evelyn Reynolds

About 90% of Chinese enterprises in the U.S. plan to maintain or boost their investment levels in the country, according to the survey.
The results come despite 60% reporting a deteriorating business environment amid concerns about policy and U.S.-China trade relations.

GP: American flag and Chinese flag
Matt Anderson Photography | Moment | Getty Images

A recent survey of Chinese enterprises in the U.S. has found that a majority remain bullish on the market long term despite growing concerns about U.S.-China relations and the broader business environment. 
The annual survey conducted by the China General Chamber of Commerce in the U.S. found that nearly 60% of companies aim to maintain a stable level of investment and that about 30% plan to boost it. 

“A notable degree of long-term optimism persisted, with the majority expressing positive future revenue expectations,” CGCC said, adding that the survey reflected “a commendable sense of optimism, determination, and resilience.” 
The survey was conducted in April and May of this year, polling nearly 100 Chinese companies across various industries about performance and outlook.
The report said Chinese firms remain committed to the U.S. market despite growing negative sentiment about the overall business environment amid rising trade tensions between the world’s two largest economies. 
Over 60% of survey respondents saw a deteriorating business environment in the U.S. Meanwhile, the rate of concern regarding a “stalemate in Sino-US bilateral relations political and cultural relations” surged to 93% from 81% a year prior.
Over the past year, the Biden administration has ramped up curbs on Chinese businesses, scrutinizing certain China-dominated industries, placing new sanctions on various Chinese firms and goods and trying to outright block Chinese ownership of certain companies and platforms.

In the survey, more than 65% of respondents identified a “complexity and vagueness” of U.S. regulatory and sanction policies toward Chinese companies as the main challenge in branding and marketing in the U.S.
“Pervasive anti-China sentiment in American public opinion” was ranked as the second largest branding and marketing challenge, according to 59% of respondents.
“These [results] highlight the intricate policy environment and the hostile public sentiment influenced by ongoing US-China trade tensions,” the report said.
The survey said a challenging market environment has broadly impacted Chinese companies’ profitability levels, with firms facing a “significant performance downturn” last year similar to that of 2020 during the coronavirus pandemic. 
More companies reported falling revenue, particularly those with significant declines of more than 20%. Companies in that category rose from 13% in 2022 to 21% in 2023. 
Hu Wei, CGCC chairman and president and CEO of Bank of China U.S.A., called on companies from both China and the U.S. to strengthen coordination to reduce trade frictions and policy barriers. 
“From a longer-term perspective, trade and investments have always been the cornerstone of the U.S.-China relations,” he said, adding that despite various uncertainties, China remains the U.S.’ third-largest trading partner and largest importer. More

Michelle Bowman, governor of the US Federal Reserve, speaks during the Exchequer Club meeting in Washington, DC, US, on Wednesday, Feb. 21, 2024. 
Kent Nishimura | Bloomberg | Getty Images

Federal Reserve Governor Michelle Bowman said Tuesday the time is not right yet to start lowering interest rates, adding she would be open to raising if inflation doesn’t pull back.
“Should the incoming data indicate that inflation is moving sustainably toward our 2 percent goal, it will eventually become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming overly restrictive,” Bowman said in prepared remarks for a speech in London. “However, we are still not yet at the point where it is appropriate to lower the policy rate.”

Those comments reflect a prevailing sentiment at the central bank, in which most policymakers have said in recent weeks that, while they still expect inflation to get back to the Fed’s 2% target, they need more evidence.
Recent readings have shown moderating inflation, with the Fed’s preferred indicator running just under 3%. However, the rate-setting Federal Open Market Committee noted after its last meeting that there has been only “modest further progress.”
Bowman noted that there are “a number of upside risks” prevailing that could accelerate her outlook, which is among the most hawkish of all policymakers.
“I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse,” she said. “Given the risks and uncertainties regarding my economic outlook, I will remain cautious in my approach to considering future changes in the stance of policy.”
The Commerce Department on Friday will release its reading on the May personal consumption expenditures price index, the Fed’s preferred inflation gauge. Economists surveyed by Dow Jones expect a 12-month inflation rate of 2.6% on both the all-items and core, which excludes food and energy prices.

While that would represent a nudge lower from April, Bowman said she still expects the Fed to hold its key overnight borrowing rate in a range between 5.25%-5.50% “for some time.”
Moreover, she indicated she is not being swayed by rate reductions from the Fed’s global counterparts such as the European Central Bank, which recently lowered its key rates by a quarter percentage point. Bowman said “it is possible over the coming months that the path of monetary policy in the U.S. will diverge from that of other advanced economies.”
Bowman’s remarks come with other officials saying Monday that they’re hesitant to cut.
San Francisco Fed President Mary Daly rejected the idea of doing a preemptive cut to hedge against deterioration in the labor market and a slowing economy.
“I do think that preemptive cutting is something that you do when you see risks,” Daly told CNBC’s Deirdre Bosa during a public event in San Francisco. “We’re going to be resolute until we finish the job. That’s why not taking preemptive action when it’s not necessary is so important.”
Also, Chicago Fed President Austan Goolsbee told CNBC’s Steve Liesman earlier on Monday that if he sees “more months” of good inflation data, then he would question whether policy needs to be as restrictive as it has been, paving the way for cuts.

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Speaking to CNBC’s Karen Tso, IMF Managing Director Kristalina Georgieva said Europe’s economic performance was strengthening and inflation was clearly on a downward trajectory.
“We come with this relatively good news and with a warning: There is no time to waste for the euro zone to concentrate on productivity,” Georgieva said.
“Right now, Europe looks like an ideas supermarket for the United States,” she added.

IMF Managing Director Kristalina Georgieva arrives at a briefing in Washington, D.C., on Friday, April 19, 2024.
Bloomberg | Bloomberg | Getty Images

The head of the International Monetary Fund on Thursday called on Europe to achieve the full potential of its prized single market, lamenting what she described as a situation that makes the region look like “an ideas supermarket” for the U.S.
Speaking to CNBC’s Karen Tso, IMF Managing Director Kristalina Georgieva said Europe’s economic performance was strengthening and inflation was clearly on a downward trajectory.

Georgieva said that the IMF observing an uptick in consumption and expected interest rate cuts from the European Central Bank spelled out good news for investment in the euro zone. She said it would bolster the 20-member bloc’s economic performance.
“We come with this relatively good news and with a warning: There is no time to waste for the euro zone to concentrate on productivity,” Georgieva said.
“That means two things. One, to achieve the full potential of the single market. It is not there yet. We want to see more labor market flexibility in Europe, we want to see [a] deepening [of] the financial markets, integrating them [and] we want to see the banking union, the capital union in place,” she continued.
“And two, we want to see much more attention to innovation, investing in [research and development], making it possible to have business based on innovation in Europe to materialize in Europe. Right now, Europe looks like an ideas supermarket for the United States,” Georgieva said.

“A lot of what is invented here ends up being commercially viable and on scale over there and when you look at the main obstacle? 27 countries not yet integrated in a single market.”

U.S. productivity gap

The European Union’s single market seeks to guarantee the unrestricted movement of goods, capital, services and labor throughout the territory.
Established more than 30 years ago, the single market is designed to allow EU citizens to live and work across the EU and to provide consumers with a wider choice of high-quality services and products.
The IMF believes deeper single-market integration could further boost the region’s economic growth.
In May, the Washington, D.C.-based institute said in a blog post that an IMF report published in 2023 estimated that reducing remaining barriers to the single market for goods and services by 10% could raise European output by as much as 7 percentage points over the long term.
“The euro area is now focusing on critical questions for the future. Among them, number one, how to lift up productivity at par with competitors, especially with the U.S.,” Georgieva said.
The IMF chief reinforced the fund’s growth outlook for the euro zone, saying the bloc was on track to register a growth rate of 0.8% in 2024, compared with 0.4% in 2023 — and increase by 1.5% next year.
Correction: A previous version of this article misstated the month that the IMF said a 10% reduction would boost European output by up to 7 percentage points. More