Recently, consulting company “Strategy Risks” released a report stating that among the 250 American large companies in China, Ford Motor Company faces the highest risk among American companies, surpassing companies like Apple and Tesla.
“Strategy Risks” is a company that helps businesses reduce operational risks in China. It analyzes and quantifies companies and industries from five aspects: fundamental operations in China, relationships with Chinese companies and government partners, regional risks, supply chain-related risks, and transparency in disclosing assessments of risks in the region.
According to Bloomberg on Monday, “Strategy Risks,” a New York-based company, analyzed the risks of the top 250 American companies in China and ranked them. The latest index shows that in 2023, Ford ranked first among these 250 largest publicly traded American companies in China, with an overall risk rating of 69 (out of 100). Apple and air-conditioning manufacturer Carrier Global Corp. tied for second place with a score of 65, while Tesla and Coca-Cola tied for third with a score of 63.
Other companies in the top ten include Cummins Inc., Honeywell International Inc., RTX Corp. (formerly known as Raytheon Technologies Corp.), Walt Disney Co., and Caterpillar Inc.
“Strategy Risks” stated that Ford Motor Company’s risk increased by 20 points compared to 2022, and its current score is more than double the average score of 34.
The ranking considered the companies’ revenue in China, relationships with Chinese companies and the government, risks related to labor, human rights, and supply chains, as well as whether companies disclosed their assessments of risks in the region.
The report by “Strategy Risks” shows that in China, Ford is at least a joint owner of seven state-controlled joint ventures and four state-influenced joint ventures as of December 2023. Ford stated that it has three joint ventures in China.
The index does not measure “presence in China” or “market share in China” but gauges “risks in China” and the extent of Ford’s engagement with the Chinese Communist Party and exposure to Chinese risks.
Earlier this year, Ford CEO Jim Farley stated that the company plans to cut all business costs in China in order to recover from sluggish sales in the country.
The American Chamber of Commerce in Shanghai’s annual survey released on September 12 revealed that political tensions, slowing Chinese economic growth, and intense competition within China are weakening American companies’ confidence in the country. Optimism about the next five years in China among surveyed American companies dropped to a historic low.
The survey of 306 American companies showed that only 47% of businesses are optimistic about their business prospects in China for the next five years, a 5% decrease from last year and the lowest since the survey began in 1999. The survey also found that the number of American companies profitable in China last year hit a record low, accounting for only 66% of the survey.