Craig Allen, president of the US-China Business Council, speaks at the Vision China event at Asia Society in New York on Tuesday. (FENG YONGBIN / CHINA DAILY)
US and Chinese companies are facing a world of uncertainty due to the trade dispute between the countries, an international business expert has warned.
"We are in an era of such huge uncertainty right now over the trade rules. It's not good," said Craig Allen, president of the US-China Business Council.
"Companies need certainty. Without certainty, how can we do business?"
However, Allen, speaking on Tuesday at a Vision China event in New York hosted by China Daily and Bank of China, said business was still strong for US companies operating in China.
"We have a glorious history. We have a mutual responsibility to ensure that the success of the past continues into the future," said Allen, a former US ambassador to Brunei Darussalam.
Even with the trade tensions, US companies were still looking to China because of its markets, talent, capital and rising middle class.
"China is 20 percent of the global population, Allen said, adding that its economy is growing by over 6 percent a year.
"And China this year will graduate about 1.8 million STEM (science, technology, engineering and mathematics) workers. That is a magnificent number."
Speaking before the event, he described China as "a very dynamic and innovative market".
The council he heads is a nonprofit organization comprising more than 200 US companies doing business in China.
Allen said more than 90 percent of its member companies reported profits in the Chinese market last year.
"Thus far in 2019, it's been a pretty good year too," he said.
According to a survey of members this year, bilateral trade tensions are overwhelmingly the top concern of US companies operating in China.
They reported that trade tensions were having a measurable impact on their competitiveness in the Chinese market, especially with domestic Chinese companies.
More than 80 percent of US companies reported that trade issues had affected their business operations in China, an 8 percentage point increase from the previous year.
"One worry is that the overall Chinese market seems to be slowing a little bit," Allen said.
"Not dramatically, but there are weak parts of the Chinese economy that some of them are feeling more acutely than others.
"The tariffs and the bilateral trade tensions are concerns for many of our companies, those who have supply chains going either from the US into China or from China into the US. Almost all of them would be affected by the tariffs."
Allen said it was natural that some companies were shifting supply chains out of China.
"However, more and more companies are investing in China, where there are a lot of opportunities," he said.
"We encourage both governments to get back to the table to resolve the trade differences.
"Both of our governments are signatories to the World Trade Organization.
"We have a common framework, we have a common language. Let's resolve the problems in accordance with our commitments.
"We believe we are not far away from that, but we just need to focus on the core problems and resolve them in a respectful, positive and constructive manner.
"The US and China have got to reach a new understanding under which both countries can continue to prosper and expand."
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