More Companies Report Losing China Sales Due to Export Controls, Survey Shows
Nearly half of respondents to a US-China Business Council survey reported losing sales to international competitors due to U.S. export controls, which is almost 20% more than last year, the council said in summary of those survey results this week. It said 56% of companies reported losing sales to Chinese competitors and that, in total, "nearly 60% of companies affected by export controls saw declines in market share last year."
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The survey found that a higher percentage of companies reported negative effects from export controls this year than last year, which it said suggests that export controls are affecting a "larger segment of the business community" than just those in the semiconductor industry. The survey said the increase in negative impacts from export controls since last year "correlates with the announcement of new restrictions on high-bandwidth memory and semiconductor manufacturing equipment sales to China in late 2024."
Sixty-two percent of respondents said that "conducting due diligence in China" is their top export control compliance challenge, while 57% reported having "trouble communicating regulatory and compliance changes" to their business partners in China, and 53% cited "delayed or unclear administrative processes."
The survey said many of the challenges exporters face arise from "potential conflicts of law between the United States and China." It cited as an example the "level of information disclosure" required to comply with "mandated end-use and end-user checks of Chinese customers" that may conflict with China’s Counterespionage Law, restricting the "unauthorized transmission of sensitive market- and company-related information abroad." The report said that as both countries continue tightening restrictions, "conflicts of law are likely to intensify."