US Companies in China Optimistic on Growth, Cautious on Regulatory Environment

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US companies in China are optimistic about their growth and profitability but uneasy about the country’s regulatory environment, according to the American Chamber of Commerce’s 2018 China Business Climate Survey Report.

Most indicators in the survey, which included responses from over 400 US companies operating in China, demonstrated improvement compared to the previous year. For instance, 64 percent of surveyed companies reported higher revenue in 2017 – the highest rate since 2013. Moreover, 73 percent stated that they were profitable or very profitable, up from 68 percent last year.

Further, 46 percent of respondents expressed confidence that China would further open its markets to foreign investment within the next three years, up from 34 percent last year.

Professional-Service_CB-icons-2017 Business Intelligence from Dezan Shira & Associates

Respondents were even comparatively optimistic on China-US relations despite unpredictability in bilateral relations and talk of a trade war. While expressing uncertainty overall, the 36 percent who said that China-US relations had improved was a marked improvement over the 17 percent from last year’s survey. The report cautioned, however, that this may be due to the fact that the survey was taken soon after US President Donald Trump’s relatively positive trip to China.

Despite positive economic performance in 2017, an overwhelming 75 percent of US firms said that they felt less welcome in China than before. Criticisms include preferential treatment for domestic companies, uneven enforcement of laws, and protectionism.

Companies in the tech sector were the most optimistic about growth prospects in China. However, 59 percent said they were treated unfairly compared to their domestic counterparts, citing the controversial Made in China 2025 policy and forced technology transfers.



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