US companies confident over Sino investment
By Wang Yanlin |
April 27, 2010, Tuesday
|
Print Edition
Print Edition
UNITED States companies are extremely optimistic about their growth prospects in the Chinese market.
Nearly four in five US firms say they will expand investment in China this year, according to a survey released yesterday by the American Chamber of Commerce.
AmCham-China member companies overwhelmingly continue to see the Chinese market as a tremendous growth opportunity, despite the exit of Internet search giant Google.
The survey found 79 percent of respondents indicated that their companies would increase investment in China this year.
More than half of them said their investment growth would exceed 10 percent.
"China remains a highly desirable destination for investment and a major global priority for American companies," AmCham-China said in its report, 2010 Business Climate Survey.
"China has grown in relative importance during the global recession and American companies operating here have improved their profit margins compared to their margins in other markets."
More firms reported a "slight" or "substantial" decrease in profits from 2008 to 2009 compared with 2007 to 2008 (31 percent versus 13 percent).
The percentage of companies reporting they were "profitable" and "very profitable" in 2009 was almost unchanged from 2008 (71 percent versus 74 percent).
Given the global economic slump, the figures demonstrated the strength of China's economic growth and explained why US companies viewed China as a global priority, the report said.
China's gross domestic product expanded 11.9 percent year on year in the first quarter of 2010, the fastest pace in more than two years.
The sharp rebound was largely thanks to the 4-trillion-yuan (US$586-billion) economic stimulus package from the central government.
But it was also clear that China faced challenges in the transition from export-led growth to domestic demand-led growth, the report said.
"As the stimulus spending finishes, the extraordinary level of government investment ends, monetary policy is normalized and steps are taken to improve the sustainability and quality of economic growth, the future path is uncertain," it said.
The report listed some relevant challenges:
Improving the efficiency of capital allocation;
Reducing the environmental burden of growth;
Increasing flexibility of the labor market;
Shifting to the clean energy required to aid economic and population growth;
Addressing the widening income equality; and
Strengthening the social safety net, especially in the areas of health-care delivery and the "under-funded" pension system.
Foreign direct investment in China expanded 12.08 percent from a year earlier to US$9.42 billion in March, extending the upward spiral for an eighth straight month.
China's Cabinet released new regulations earlier this month to encourage sound overseas investment.
Under these rules, China will still welcome foreign investment in high-tech industries, services sectors, energy-saving and environmental protection.
Polluting and energy-hungry projects in overcapacity industries are not wanted.
Nearly four in five US firms say they will expand investment in China this year, according to a survey released yesterday by the American Chamber of Commerce.
AmCham-China member companies overwhelmingly continue to see the Chinese market as a tremendous growth opportunity, despite the exit of Internet search giant Google.
The survey found 79 percent of respondents indicated that their companies would increase investment in China this year.
More than half of them said their investment growth would exceed 10 percent.
"China remains a highly desirable destination for investment and a major global priority for American companies," AmCham-China said in its report, 2010 Business Climate Survey.
"China has grown in relative importance during the global recession and American companies operating here have improved their profit margins compared to their margins in other markets."
More firms reported a "slight" or "substantial" decrease in profits from 2008 to 2009 compared with 2007 to 2008 (31 percent versus 13 percent).
The percentage of companies reporting they were "profitable" and "very profitable" in 2009 was almost unchanged from 2008 (71 percent versus 74 percent).
Given the global economic slump, the figures demonstrated the strength of China's economic growth and explained why US companies viewed China as a global priority, the report said.
China's gross domestic product expanded 11.9 percent year on year in the first quarter of 2010, the fastest pace in more than two years.
The sharp rebound was largely thanks to the 4-trillion-yuan (US$586-billion) economic stimulus package from the central government.
But it was also clear that China faced challenges in the transition from export-led growth to domestic demand-led growth, the report said.
"As the stimulus spending finishes, the extraordinary level of government investment ends, monetary policy is normalized and steps are taken to improve the sustainability and quality of economic growth, the future path is uncertain," it said.
The report listed some relevant challenges:
Improving the efficiency of capital allocation;
Reducing the environmental burden of growth;
Increasing flexibility of the labor market;
Shifting to the clean energy required to aid economic and population growth;
Addressing the widening income equality; and
Strengthening the social safety net, especially in the areas of health-care delivery and the "under-funded" pension system.
Foreign direct investment in China expanded 12.08 percent from a year earlier to US$9.42 billion in March, extending the upward spiral for an eighth straight month.
China's Cabinet released new regulations earlier this month to encourage sound overseas investment.
Under these rules, China will still welcome foreign investment in high-tech industries, services sectors, energy-saving and environmental protection.
Polluting and energy-hungry projects in overcapacity industries are not wanted.
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