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Survey claims manufacturing firms plan China expansion
By Fu Chenghao |
February 21, 2009, Saturday
|
Print Edition
Print Edition
Many multinational manufacturing companies plan to expand operations in China despite the economic downturn, a study claims.
The global crisis has made China more attractive to foreign investment compared with other low-cost nations, given its relatively strong growth prospects, says the study, conducted by the American Chamber of Commerce in Shanghai and consulting firm Booz & Co.
"Despite the global downturn, China is still considered a growth market," said Ted Hornbein, governor of AmCham Shanghai.
The study, released yesterday, polled 108 foreign manufacturing companies in the second half of last year, during the early stages of the downturn. About 10 percent of the polled said they aimed to relocate their Chinese manufacturing facilities to other countries over the next five years, fewer than 17 percent in 2007, the study claims.
Nearly half of those who took part in the study expressed an interest in expanding production capacity in China over the next few years.
The number of companies who expressed concern about China losing its competitive edge to lower-cost countries such as India and Vietnam fell by more than half. The survey a year earlier found China risked losing its edge due to rising costs.
Foreign direct investment in China fell 32.7 percent to US$7.54 billion last month from a year ago, but the government said the decline was distorted by the timing of the Spring Festival holiday, which occurred in February last year but January this year.
Last month's FDI was about the same as the monthly average last year and higher than the average monthly inflow of US$6.17 billion since September, a Commerce Ministry spokesman said.
Further questions were put to 79 respondents in late December. Nearly 50 percent said they suffered fourth-quarter export declines of more than 10 percent, and more than 40 percent said domestic sales dropped more than 10 percent.
The global crisis has made China more attractive to foreign investment compared with other low-cost nations, given its relatively strong growth prospects, says the study, conducted by the American Chamber of Commerce in Shanghai and consulting firm Booz & Co.
"Despite the global downturn, China is still considered a growth market," said Ted Hornbein, governor of AmCham Shanghai.
The study, released yesterday, polled 108 foreign manufacturing companies in the second half of last year, during the early stages of the downturn. About 10 percent of the polled said they aimed to relocate their Chinese manufacturing facilities to other countries over the next five years, fewer than 17 percent in 2007, the study claims.
Nearly half of those who took part in the study expressed an interest in expanding production capacity in China over the next few years.
The number of companies who expressed concern about China losing its competitive edge to lower-cost countries such as India and Vietnam fell by more than half. The survey a year earlier found China risked losing its edge due to rising costs.
Foreign direct investment in China fell 32.7 percent to US$7.54 billion last month from a year ago, but the government said the decline was distorted by the timing of the Spring Festival holiday, which occurred in February last year but January this year.
Last month's FDI was about the same as the monthly average last year and higher than the average monthly inflow of US$6.17 billion since September, a Commerce Ministry spokesman said.
Further questions were put to 79 respondents in late December. Nearly 50 percent said they suffered fourth-quarter export declines of more than 10 percent, and more than 40 percent said domestic sales dropped more than 10 percent.
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