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US firms in China less optimistic amid slowing economy, trade war: survey

More U.S. companies operating in China lowered their revenue growth outlook for 2019 due to concerns about economic weakness and trade tensions, according to a survey by the American Chamber of Commerce in Shanghai.

Of the respondents, 27.1% project lower 2019 revenues, compared with only 6.1% that estimated weaker revenues for 2018.

Business optimism about the next five years waned, with 61.4% of companies saying they were confident about the outlook, down 19.0 percentage points from last year's survey. Respondents identified a slowing economy as their biggest challenge over the next three to five years, followed by U.S.-China trade tensions.

Consequently, pessimism levels climbed to 21.1% from 7.1%, led by non-consumer electronics companies.

Meanwhile, 26.5% of the respondents said they had redirected investment from China to other locations, up 6.9 percentage points from last year. Southeast Asia was the top destination, followed by India. The share of companies that had redirected investment to the U.S. fell to 5.5% from 6.5%.

"A pick-up in China's economy would clearly shift some of the gloom, but an end to tariffs would be the most welcome news," AmCham Shanghai said.

The survey was conducted on 333 AmCham Shanghai members between June 27 and July 25, more than a month before the U.S. and China's new tit-for-tat tariffs took effect.