U.S. companies view competition from their Chinese counterparts among the top challenges they face, according to a member survey by the US-China Business Council.
The group said that while the Chinese market has stabilized, American companies are concerned about competing against Chinese government-backed companies.
“Nearly three-quarters of respondents know or suspect that their state-owned enterprise (SOE) competitors receive benefits from the Chinese government that their company does not,” the survey said. “This percentage is lower when it comes to respondents’ knowledge of their private Chinese competitors receiving state support, but it still represents a majority.”
The country's data flaws and privacy rules were No. 4 on the list of American companies’ primary challenges, according to the survey. More than 80% of respondents were concerned about the country's extensive and unproven cyber and privacy policies and regulations.
In addition, financial conglomerates and stateside investors are worried about inherent risks in conducting business by relying on China's economic reports. The Chinese government has honed in on suppressing economic data such as inflation and unemployment, according to the U.S.-China Economic and Security Review Commission's 2021 report to Congress.
The survey said apprehensions about cyber-related issues were as follows:
58% limitations on cross-border data flows in Chinese regulations;
56% vagueness of compliance requirements and terms;
54% data localization requirements;
49% failure to utilize global information-technology solutions or non-Chinese cloud-based applications in China internet service within China;
38% aggressive cybersecurity inspections from government regulators;
29% intellectual property theft;
29% the legal liability due to collection and management of personally identifiable information;
24% the loss of sales in China due to national security/protectionism;
15% the burden to use Chinese encryption algorithms;
8% other; and
7% the involvement in domestic cyber-related standards bodies.
The group's 100-plus members were surveyed in June 2021. The US-China Business Council has conducted the survey for more than a decade.