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US businesses are satisfied with the performance of their China operations and optimistic about their future, according to a report by two major US business organizations in China, which was released Thursday in Beijing.
The American Business in China White Paper by the American Chamber of Commerce in China (AmCham-China) and AmCham Shanghai indicates that 10 percent of the 254 survey respondents said their businesses in China are very profitable and another 65 percent said their businesses were profitable.
Of the remaining 25 percent, 91 percent believe they will begin to make a profit within three years.
"This is an indication that market access in China has improved, economic growth is strong, and American companies have learned how to do business in China," said Christian Murck, chairman of AmCham China on the release of the annual white paper by the two councils representing US-invested companies in China.
The result was based on a survey of US-invested firms in north and east China and 254 responded, the highest number since the white paper was first prepared in 1999.
The survey also shows that 80 percent of the respondents said their revenues in China grew between 2001 and 2002, of which 44 percent said they saw substantial increases.
US businesses also believe their competitiveness in the China market has increased in the past year.
Last year, almost 80 percent of the respondents said they were facing increased competition from foreign and domestic companies, but the rate dropped to about 50 percent this year.
US companies in China believe that the conditions for doing business in the world's most populous country have improved substantially in the past five years and expect a favorable climate in the next five years.
More than 90 percent of the respondents said they were optimistic or cautiously optimistic about prospects in China for the coming five years.
Over 80 percent of the surveyed businesses expressed an intention to increase their activities in building new or expanding existing facilities or extending their coverage in China.
However, AmCham China and AmCham Shanghai also pointed out several uncertainties in the development of the Chinese economy, which may cause potential threats to US businesses, including the pressure from the United States, the European Union and Japan for a revaluation of renminbi, the weakness of China's financial sector, the increasing trend of budget deficits in China, and the lack of social security funds.
The surveyed US businesses also expressed their worries about several challenges, such as the tightening down on non-immigrant visas by the United States government after the September 11 terrorist attacks, China's new technical standards, problems in the protection of intellectual rights in China, and lack of qualified local management personnel.
(China Daily September 26, 2003)
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