Beijing’s new supply chain rules deepen concerns for US firms in China
The regulations could add pressure on companies already navigating policy uncertainty and uneven market access, according to a new white paper by the American Chamber of Commerce in China.
by Louisa Tang · CNA · JoinRead a summary of this article on FAST.
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American businesses in China are raising fresh concerns over Beijing’s new supply chain regulations, according to a white paper released by the American Chamber of Commerce (AmCham) in China on Thursday (Apr 23).
These concerns come as companies assess how the rules – released on Apr 7 – might affect decisions on expanding production and global supply chains.
AmCham China’s president Michael Hart said early indications suggest these measures could complicate efforts to diversify supply chains away from China.
The new regulations allow Chinese authorities to take measures against foreign companies or individuals that “harm China’s industrial and supply chain security”, Hart noted.
“It doesn't seem to make a lot of sense to us,” he told CNA’s East Asia Tonight programme.
“But we're looking, certainly, for ways to continue to see our AmCham China member companies participate in the China market like they have done for years.”
Beijing’s new rules come as global supply chains are already under strain from geopolitical tensions, prompting companies to reassess risk exposure across regions.
“It starts to feel a little bit like COVID-19 2.0 where people are starting to think about their overall supply chains, how China is linked to factories in other parts of Southeast Asia or other parts of the world,” Hart said, referring to rising instability linked to tensions in the Middle East.
“What we hear a lot is that China is making comments to everyone: ‘Look, China is the stable player in the world’,” he noted.
While American companies have not been significantly affected by the US-Israel war on Iran, they are “certainly taking notice and trying to make preparations”, Hart added.
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IMPACT ON BUSINESS CONFIDENCE, LONG-TERM INVESTMENT
In its white paper, AmCham China warned that broader policy uncertainty and uneven market access could undermine business confidence and long-term investment, even as China remains a critical market for many US firms.
The business group is calling for tariffs and export controls between Beijing and Washington to be “limited strictly to genuine national security concerns”, and urged both governments to rebuild dialogue channels at all levels.
AmCham China also highlighted broader global uncertainties shaping business sentiment.
Its earlier business climate survey, released in January, found that China’s slowing growth – which was included as a survey option for the first time – was cited by more than 60 per cent of respondents as their top concern.
Strained US-China relations, which had topped the list in recent years, fell to second place, while industrial overcapacity entered the top five challenges for the first time.
Against this backdrop, AmCham China said it is pushing for clearer policies, more consistent and transparent implementation of regulations, and fairer market access for foreign firms.
This comes ahead of an expected visit by US President Donald Trump to China next month – a development that businesses are watching closely for signals on the direction of bilateral ties.
“The visit is very important, but in some ways, expectations are fairly low,” Hart said.
“The most important thing is that President Trump and (Chinese) President Xi (Jinping) meet and that they tell their two respective sides: ‘Let's move forward and work together.’”
While companies are not expecting sweeping agreements, even modest outcomes could help stabilise sentiment, Hart added.
“People aren't looking for a grand bargain or a huge, long list of things, but two or three things would be helpful.”
Potential areas of progress could include agriculture, such as increased US soybean exports, reduced restrictions on US beef, and cooperation in aviation.
STRUCTURAL ISSUES STILL OF CONCERN
Still, structural issues highlighted in the white paper, including regulatory inconsistency, remain a key concern for businesses operating in China.
“The central government would say: ‘Yes, we want to make sure that American companies or foreign companies have equal access.’ But when it comes down to the local provinces, sometimes the implementation is not necessarily consistent,” Hart pointed out.
Challenges around government procurement, particularly in sectors such as healthcare, also continue to affect foreign firms’ ability to compete on equal footing, he added.
Despite these pressures, Hart said many US companies remain committed to China, drawn by its market scale and growth potential.
He stressed that having a presence in China remains critical for global competitiveness, particularly in certain areas of research and development like life sciences and manufacturing.
“One of our CEOs told his company: ‘Look, if you don't want us to play in China, what you're actually advocating is for our company to be smaller globally. Is that what you want?’
“Very few companies want to get small globally, and so you do need to participate in China and the large market that it is,” Hart added.
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