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US firms set to raise China investment: AmCham
By Wang Yanlin |
March 26, 2012, Monday
|
Online Edition
Online Edition
MOST United States firms in China will continue to raise their investment in the world's second-largest economy this year, but the pace of the increase is expected to be moderating, a survey by the American Chamber of Commerce in China showed today.
Also, China's charm remained and it continues to rank within the top three global investment venues for the majority of American companies, AmCham China said after it tallied responses from 390 members.
Given China's growth history and the rapidly expanding consumer and corporate markets, it is no wonder that 78 percent still list China as a top-three global market, the chamber said.
For 2012, 82 percent of respondents said they plan to expand investment in their China operations, about the same as last year's level.
However, the percentage of those gearing to boost investment 21 percent or more declined, likely a response to slower economic growth and rising costs in China.
"The survey results showed AmCham member companies are a little less optimistic than they were a year ago, although China still remains a relative bastion of growth among generally sluggish major world economies," the survey report said.
"China remains an important profit center for multinational companies, relative to other regions of the world."
It found 76 percent of member companies forecast their 2012 revenues to surpass those of 2011, and 68 percent expect their China operating margins to be more than their worldwide operating margins.
But many hurdles remain.
The survey said foreign businesses continue to struggle with challenges such as irregular licensing practices, poorly-enforced intellectual property rights, and a limited local talent pool.
Despite China's economic evolution, in many areas business regulations remain out of step with accepted international practice, the survey report said.
For example, there is a widespread perception that domestic companies enjoy more favorable treatment in securing required business licenses. In 2011, the percentage of survey respondents who said licenses are granted equally to foreign and Chinese companies declined by seven percentage points to 22 percent.
On another front, over three quarters of respondents rate China's enforcement of IPR as ineffective – a troublesome sign at a time China is actively seeking to promote innovation among domestic industries, the survey said.
Also, China's charm remained and it continues to rank within the top three global investment venues for the majority of American companies, AmCham China said after it tallied responses from 390 members.
Given China's growth history and the rapidly expanding consumer and corporate markets, it is no wonder that 78 percent still list China as a top-three global market, the chamber said.
For 2012, 82 percent of respondents said they plan to expand investment in their China operations, about the same as last year's level.
However, the percentage of those gearing to boost investment 21 percent or more declined, likely a response to slower economic growth and rising costs in China.
"The survey results showed AmCham member companies are a little less optimistic than they were a year ago, although China still remains a relative bastion of growth among generally sluggish major world economies," the survey report said.
"China remains an important profit center for multinational companies, relative to other regions of the world."
It found 76 percent of member companies forecast their 2012 revenues to surpass those of 2011, and 68 percent expect their China operating margins to be more than their worldwide operating margins.
But many hurdles remain.
The survey said foreign businesses continue to struggle with challenges such as irregular licensing practices, poorly-enforced intellectual property rights, and a limited local talent pool.
Despite China's economic evolution, in many areas business regulations remain out of step with accepted international practice, the survey report said.
For example, there is a widespread perception that domestic companies enjoy more favorable treatment in securing required business licenses. In 2011, the percentage of survey respondents who said licenses are granted equally to foreign and Chinese companies declined by seven percentage points to 22 percent.
On another front, over three quarters of respondents rate China's enforcement of IPR as ineffective – a troublesome sign at a time China is actively seeking to promote innovation among domestic industries, the survey said.
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