SHANGHAI (Reuters) – U.S. companies’ optimism about business conditions in China has recovered to hit three-year highs even though the firms have reservations about Beijing’s COVID-19 policy, an annual survey showed on Thursday.

A U.S. industry lobby executive stated that Beijing’s extensive crackdown on businesses has unnerved American firms.

According to the American Chamber of Commerce Shanghai (consultant PwC China), the increased optimism was due to increasing revenues and waning concerns about the COVID-19 pandemic. China has mostly mastered this problem with its zero tolerance policy.

The Trump administration launched a brutal trade war against China, and also inflicted sanctions on some of China’s most prominent tech companies. U.S.-China relations hit a low point in 2019.

However, although relations remain tensionful, the Biden administration seems to be more open to taking direct actions against Beijing.

“Business in China recovered quickly from last year’s lockdown,” said Ker Gibbs, president of the American Chamber of Commerce in Shanghai which published the survey that was conducted between mid-June and mid-July.

“However, we are still feeling the pandemic’s effects, with members continuing to be negatively impacted by China’s travel restrictions. While overall business performance has been good, there is a certain amount of anxiety.

According to the survey, 78% said they were optimistic or mildly optimistic regarding their 5-year business outlook for 2021. That’s nearly 20 percent more than in 2020 and an increase of almost 20 percentage points over 2018.

In contrast, only 10% of the respondent businesses in 2021 described themselves as being “pessimistic about their five year outlook, which is a significant difference from 18% and 21% in 2019 and 2020, respectively.

The survey found that respondents expressed concerns about some Chinese policies, particularly in relation to the hiring of labour.

Nearly two-thirds (31.4%) of the respondents stated that they intend to raise their China workforce this year. However, only 62.3% described worker availability as an obstacle or serious hindrance.

China’s borders remain closed to all visitors, regardless of whether they have the proper residency or work permit. Also, every visitor must undergo at least two weeks quarantine before entering.

A slight decrease in transparency was also noted by companies. Respondents rated the regulatory environment as transparent at 46.7% in 2021, compared to 51.4% last year.

These figures are based on a year in which Chinese authorities have been tightening regulations across a wide range of industries and implementing new data privacy laws.

“Further hindering our members, many regulatory changes were enacted after our survey closed. Gibbs said that although they had intentions, the changes were not announced in advance, which is a problem for companies.