2011-2012 China Business Report

Three years after the global economic downturn, U.S. companies in China continue to report positive financial performance even as they contend with rising costs, increasing competition and an uneven regulatory environment, according to AmCham Shanghai’s 2011–2012 China Business Report released February 15 at the Four Seasons hotel in Shanghai. Key findings from the report include: - 78 percent of companies surveyed report that they are “profitable” or “very profitable,” roughly matching results from 2010; - 80 percent of companies surveyed report revenue growth in 2011 over 2010, down from 87 percent who said revenue increased in 2010 from 2009 in last year’s survey; - 62 percent of companies report importing or finished goods from the U.S. into China to support their China operations. “The mission of AmCham Shanghai is to support both the business success of our members and a healthy U.S.-China commercial relationship.” said Brenda Foster, president of AmCham Shanghai. “I’m pleased to see that our members reported strong financial performance in 2011 but I am concerned that U.S. companies are facing many of the same challenges that have been raised for some time. On behalf of our more than 3,600 members, I look forward to addressing these issues with both the U.S. and Chinese governments.” While U.S. companies remain committed to competing in the China market, they are less optimistic about their business prospects in China compared to the preceding year. Rising costs take the top spot on the list of business challenges faced by U.S. companies. Perhaps as a result, the number of companies reporting increased margins from the year before slipped in 2011 to 51 percent from 66 percent in 2010. A majority of survey participants cite leading regulatory issues – bureaucracy, an unclear regulatory environment and a lack of transparency - as a hindrance to their China business and nearly three-quarters report China’s regulatory environment stayed the same or deteriorated in 2011.