This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

US Companies Upbeat On Near Term, But Concerned On Reform Outlook In China, According To Annual Business Climate Survey

BEIJING, March 29, 2013 /PRNewswire/ -- As the China market enters a new era marked by more moderate economic growth and rising labor costs, US companies remain upbeat on the near-term outlook, according to the latest Business Climate Survey from the American Chamber of Commerce in the People's Republic of China (AmCham China). Over three quarters of respondents indicated they were optimistic about how their companies will perform over the next two years in China.

Yet the survey also reflects growing concerns that the momentum for reforms has lagged. Only 28 percent said the quality of China's business investment environment is improving, down from 43 percent a year ago.

The chamber's 15th annual survey tallied results from 325 respondents, including members from Beijing and the chapters in Northeast China ( Dalian), Tianjin, and Central China ( Wuhan).

In general, members' China operations showed strong performance. Nearly three quarters – 71 percent – said their company posted sales growth in 2012. And 44 percent report the profit margins for their China operations are higher than their company's global average.

But member companies have recently been reining in the scale of their expansion plans. For example, as recently as four years ago, a third of respondents expected to increase investments in the range of 21 percent to over 50 percent within a year; now only 18 percent do.

Asked why they plan to moderate expansion, one third of respondents cited expectations of slower economic growth in China. But substantial numbers also singled out concerns about the business environment: 26 percent pointed to market access barriers for foreign companies, and 22 percent said regulatory uncertainty was a factor.

"The results of this year's survey reflect a slightly more conservative business outlook, as China focuses on promoting higher-quality economic expansion in an era of rebalancing," said AmCham China chairman Greg Gilligan. "Especially in an environment with slower growth, the tenor of business policies has a substantial impact on investor sentiment. Regulatory improvements and progress on market reforms would help to inspire confidence that China is creating the conditions for sustainable long-term business growth."

Other highlights from this year's results include the following:

  • This year, the percentage of respondents who said their goal is to sell directly into the China market reached a historic high, at 71 percent.
  • Rising labor costs and a domestic economic slowdown are tied for first place on the list of top business risks in China. Shortages of qualified employees and managers are seen as the next biggest risks.
  • Only 10 percent of respondents would consider using China-based cloud computing services. For those who would not consider using the cloud in China, the main reason is worries over data security. 
  • Amid rising concerns over corporate cybersecurity, just over one quarter of respondents reported that proprietary data or trade secrets have been breached or stolen from their China operations.

About the American Chamber of Commerce in the People's Republic of China: AmCham China is a national non-profit organization representing the interests of over 1,000 companies and 3,500 individuals doing business throughout China. Headquartered in Beijing, it has chapters in Tianjin, Northeast China ( Dalian) and Central China ( Wuhan). For more information, visit: www.amchamchina.org

 

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,131.97 +100.83 0.59%
S&P 500 1,998.98 +14.85 0.75%
NASDAQ 4,552.7590 +33.8570 0.75%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs