Before the coronavirus epidemic, U.S. companies were heading for record-low profitability in China as business conditions deteriorated and China’s economy slowed to its lowest rate in decades, according to a new survey of U.S. companies with operations in China, the Wall Street Journal reported. That position will be further challenged as these companies seek to absorb what could be a historic hit in China, the world’s second-largest economy and the epicenter of the novel coronavirus now ravaging the global economy. The annual snapshot of business conditions, captured by the Beijing-based American Chamber of Commerce in China in a survey conducted in October and November last year, underscores how fragile conditions were for American companies before the Covid-19 epidemic began to come into public view in mid-January. Before the outbreak, U.S. companies in China were already concerned about their business prospects in the country, largely because of U.S.-imposed tariffs that had weighed on demand and increased manufacturing costs. The rising cost of labor in China also led some firms to move their supply chains out of China, while others said the softening economy in China had made it difficult to grow.
