Tags: US | CHINA | POLITICS AND GOVERNMENT

U.S. Firms Optimistic in China Despite Worries

Friday, 02 Apr 2010 01:09 PM

Most U.S. companies are doing well in China and remain optimistic about their prospects despite unease over the country's regulatory environment, AmCham China said on Friday.

Sentiment has broadly returned to pre-crisis levels, with only five percent of respondents more pessimistic about the outlook for their companies in 2010 compared with last year.

On a five-year view, 91 percent of firms were optimistic, the group's 2010 Business Climate Survey showed.

But John Watkins, chairman of the American Chamber of Commerce in China, said a number of adverse trends significantly tempered the positive outlook.

For the first time in the history of the survey, inconsistent regulatory interpretation had become the biggest challenge facing American companies in China, Watkins said in a foreword.

Other concerns included policies that discriminate in favor of domestic innovation and regulations that throw up barriers to sectors that had been increasingly open for the past 30 years.

"These policies appear to be diminishing the ability of foreign companies to access the Chinese domestic market, right at the time China shifts from being an export-led economy to a more domestic-consumption-led economy," he said.

But Watkins said AmCham-China was cautiously optimistic that China would continue to pursue the market-oriented reforms that have propelled its economic rise. "We hope China will resist moves in the direction of market intervention," he said.

China's Foreign Ministry said on Thursday that foreign firms were treated fairly in China, and the many profitable operations in the country testified to its healthy business climate.

"The Chinese government treats domestic and foreign enterprises equally. There is no discrimination," spokesman Qin Gang told a regular news conference.

"We give foreign enterprises the same treatment as Chinese citizens. We see them as like our own family."

He added, however, that companies and individuals that broke the law would also be treated the same way as Chinese peers.

Other findings from the AmCham survey include:
• As in recent years, China remains a top-three global investment priority for more than 75 percent of respondents;
• Profitability has remained broadly constant, but the proportion of "very profitable" firms has dropped steadily to 6 percent in 2009 from 16 percent in 2003.
• A total of 46 percent of respondents said their operating margins were higher in China than worldwide, up from 35 percent in 2008;
• A total of 44 percent of firms postponed or canceled investment in China last year due to the financial crisis, but almost 80 percent plan to increase investment in 2010.

AmCham surveyed its members in November and December. It received replies from 388 members, a 35 percent response rate.

© 2017 Thomson/Reuters. All rights reserved.

 
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Most U.S. companies are doing well in China and remain optimistic about their prospects despite unease over the country's regulatory environment, AmCham China said on Friday. Sentiment has broadly returned to pre-crisis levels, with only five percent of respondents more...
US,CHINA,POLITICS AND GOVERNMENT
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2010-09-02
Friday, 02 Apr 2010 01:09 PM
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