SHANGHAI, March 5, 2015 /PRNewswire/ -- While the majority of U.S. companies are profitable and still enjoy growing revenue, the risk of an economic slowdown, direction of China's economic reform and perceptions of regulatory bias against international companies are tempering long-term optimism, according to the 2015 China Business Report released today by The American Chamber of Commerce in Shanghai (AmCham Shanghai).
This year's report includes responses from 377 company executives. The results show that 73% of U.S. companies are profitable and 75% experienced revenue growth in 2014. 96% said their companies had increased or maintained investment levels in China during 2014.
"The survey data on business performance shows that our members continue to succeed and embrace opportunities in China," Kenneth Jarrett, President of AmCham Shanghai said. "Competition is becoming more intense and China's economy is slowing down, but even at the current GDP growth rate, China will continue to offer many opportunities to American business."
According to the report, most U.S. companies (85% of all) have an optimistic five-year outlook, reflecting a general sense of confidence in the business opportunities in China. However, there has been a shift in the degree of optimism, with 10% moving from the "optimistic" category to the less exuberant "slightly optimistic" category. This reflects concern over the slowing Chinese economy, increasing costs and a growing perception of regulatory bias against foreign firms.
"Many foreign companies in China are starting to find themselves 'stuck' between a slowing economy and a still-challenging commercial environment," says Kent Kedl, Greater China Managing Director for Control Risks, AmCham Shanghai's partner for the report. "Many companies are growing at a slower rate and they still need to deal with the difficulties of the lack of transparency and corruption issues in China."
The report also shows that executives view China increasingly as not one but many markets. Companies focused on the consumer market are the most optimistic because of the emerging Chinese middle class. On the other hand, companies engaged in low-cost production or export manufacturing operations, as well as legal and accounting firms, say rising costs and domestic competition are now key issues, and they are preparing for slower growth.
Another highlight of the survey results is that a record 67% of U.S. companies reported that they are producing or sourcing goods or services in China for the China market -- an "in China, for China" strategy.
Commenting on this trend, Robert Theleen, 2015 Chairman of AmCham Shanghai said, "To succeed in China, it's important to have a focus. We need to design unique products and services for the China market. Innovation is what Americans do best. This year is the 100th anniversary of the founding of AmCham Shanghai. The American business community has had a positive impact on China's development over the last century and this same commitment will be true for the next 100 years. Secondly, for the reasons mentioned above, American CEOs in China have to manage both the top and the bottom line. Growth for growth's sake is yesterday's strategy in China."
About the American Chamber of Commerce in Shanghai
The American Chamber of Commerce in Shanghai, known as the "Voice of American Business" in China, is the largest and fastest growing American Chamber in the Asia Pacific region. Founded in 1915, AmCham Shanghai was the third American Chamber established outside the United States. As a non-profit, non-partisan business organization, AmCham Shanghai is committed to the principles of free trade, open markets, private enterprise and the unrestricted flow of information.
AmCham Shanghai's mission is to enable the success of our members and strengthen U.S.-China commercial ties through our role as a not-for-profit service provider of high quality business resources and support, policy advocacy and relationship-building opportunities. Visit www.amcham-shanghai.org for more information about us.
About Control Risks
Control Risks is an independent, global risk consultancy specializing in political, integrity and security risk. We help some of the most influential organizations in the world to understand and manage the risks and opportunities of operating in complex or hostile environments.
We support clients by providing strategic consultancy, expert analysis and in-depth investigations through to handling sensitive political issues and providing practical on the ground protection and support.
Our unique combination of services, our geographical reach and the trust our clients place in us, ensures we can help them effectively solve their problems and realize new opportunities across the world. Working across five continents and with 36 offices worldwide, Control Risks provides a broad range of services to help our clients manage political, integrity and security risk.
Please visit www.controlrisks.com for more information about us.
Media Contact:
Junling Cui
junling.cui@amcham-shanghai.org
+86-21-6279-7119 ext. 5655
