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Foreign makers eye China's market
By Wang Yanlin |
March 30, 2010, Tuesday
|
Online Edition
Online Edition
FOREIGN manufacturers increasingly focus on accessing the Chinese market while the number of companies viewing China purely as an export base continues to decline, according to a report today by the American Chamber of Commerce in Shanghai.
The survey, conducted by AmCham Shanghai and Booz & Company, included 1,430 plants of 202 member firms. It found 83 percent of respondents said their primary motive for locating manufacturing in China is to access the Chinese marketplace, up from 71 percent two years ago.
Meanwhile, the percentage of companies planning to use China primarily as a base to supply other Asian markets has slipped to 50.5 percent from 54.6 percent in 2008.
"Multinationals are shifting their China strategy as the country's manufacturing sector matures," said Joni Bessler, a partner of Booz & Company.
Brenda Foster, president of AmCham Shanghai, said: "China can no longer be viewed solely as a hub for low-cost exports. The growing domestic market in China offers rich opportunities to foreign-invested manufacturers."
However, more challenges have emerged from the rising costs of labor and materials, propelling some companies to look for lower-cost locations, both inside and outside China.
The survey found half of the respondents have relocation or expansion plans -- almost twice as many as in 2008 -- and 42 percent of them plan to relocate or expand within China.
"There has been a dramatic increase in the percentage of respondents that are considering relocation and/or expansion," the report said. "For companies with plans to relocate or expand within China, southwest China and the Yangtze River Delta region remain the preferred location. For those relocation candidates outside China, the top choices include India, Vietnam, Latin America and Eastern Europe."
The survey, conducted by AmCham Shanghai and Booz & Company, included 1,430 plants of 202 member firms. It found 83 percent of respondents said their primary motive for locating manufacturing in China is to access the Chinese marketplace, up from 71 percent two years ago.
Meanwhile, the percentage of companies planning to use China primarily as a base to supply other Asian markets has slipped to 50.5 percent from 54.6 percent in 2008.
"Multinationals are shifting their China strategy as the country's manufacturing sector matures," said Joni Bessler, a partner of Booz & Company.
Brenda Foster, president of AmCham Shanghai, said: "China can no longer be viewed solely as a hub for low-cost exports. The growing domestic market in China offers rich opportunities to foreign-invested manufacturers."
However, more challenges have emerged from the rising costs of labor and materials, propelling some companies to look for lower-cost locations, both inside and outside China.
The survey found half of the respondents have relocation or expansion plans -- almost twice as many as in 2008 -- and 42 percent of them plan to relocate or expand within China.
"There has been a dramatic increase in the percentage of respondents that are considering relocation and/or expansion," the report said. "For companies with plans to relocate or expand within China, southwest China and the Yangtze River Delta region remain the preferred location. For those relocation candidates outside China, the top choices include India, Vietnam, Latin America and Eastern Europe."
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