Path: Sino-US >> Sino-US News>> Biz >>
Foreign businesses in China report improved profits despite rising concerns on policy environment: survey
More foreign businesses in the country reported improved profits and revenue growth in 2016, although their concerns over new government policies to foster Chinese national champions continue to mount, a survey showed Wednesday.

“Halfway through 2017, American companies are reporting an improved market environment for their goods and services, but a difficult policy environment that poses long-term challenges to the success of US companies,” said the 2017 China Business Report released by the American Chamber of Commerce in Shanghai (AmCham Shanghai) in collaboration with PwC. The report is based on a survey of 426 companies.

The survey included questions designed to measure trends in company performance, challenges and investment, as well as questions about trade policy, hiring conditions and trends driving business.

The business performance of most companies improved in 2016, it said, citing the reason of Chinese government’s mid-year stimulus which had helped recharge the economy in the late 2016. 73.5% of companies reported revenue growth in 2016, recovering from the 61% recorded in 2015. Retail and services performed better than manufacturing. More companies were profitable, led by the non-consumer electronics and pharmaceutical/medical devices/life sciences industries.

Although the survey results show upbeat sentiment in the 2016 performance and revenue forecasts for 2017, the underlying concerns about the investment climate in China, such as market barriers and basic fairness, continue to exist.

China uses government subsidies, licensing requirements and procurement policies to prop up Chinese companies in bid to cultivate Chinese global champions. This is “to make it difficult for American companies to compete in China,” warned the report.

The chamber said its member companies welcome challenges from agile and web-savvy domestic competitors but called for government policies and regulations that favor domestic companies over foreign businesses to stop. 40 percent of the surveyed believed the U.S. government should use investment reciprocity as a tool to gain greater market access in China for US companies.

Despite the setbacks, the silver lining is that anxieties that companies had over the past year about US-China relations have subsided as most of President’s Trump’s trade-focused election rhetoric did not become policy and the US and Chinese leaders had a productive first summit meeting in Florida.

During President Xi Jinping’s summit with his US counterpart in Florida in April, a 100-day action plan for economic cooperation between China and the US was adopted. And both countries had brought the cooperation to a higher level by discussing resuming the US beef exports to China during the China-US Think Tank Symposium held in Des Moines, capital of Iowa last month. China halted beef imports from the US in 2003, while it is now the world’s second-largest beef consumer after the US.

Member companies of the chamber admitted that US-China commercial relations have brought immense benefits to both countries. “We welcome actions by our governments to address longstanding market access barriers and allow the bilateral commercial relationship to realize its full potential,” the report wrote, noting the “100-Day Plan” has brought some “early results”, while urging the bilateral discussions underscore the importance of “genuine economic reform” in China.

Related Stories
Share this page
Touched Sympathetic Bored Angry Amused Sad Happy No comment

Daan Roosegaarde: A Dutch artist’s mission to clear smog from Chinese citiesUS beef sales face hurdles in ChinaMan's death sparks public outcry over lax regulation of Internet firmsTrump threatens China with new trade war, Beijing appears unmovedPatience has 'bottom line', India toldWill unmanned stores take off in China?Trump administration to act against alleged China trade violationsStarbucks shifts gear in China with big acquisitionCandid dialogue key to improving China-South Korea relationsMilitary action movie arouses patriotic sentiment among Chinese audience
< Prev Next >