Most multinationals confident in Chinese market

15:37, March 17, 2011      

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Most multinational corporations in China are optimistic about the Chinese market and are willing to develop with China while taking a tolerant and cooperative attitude on solving problems, according to a new survey released on March 15.

The China Development Research Foundation (CDRF) under the Development Research Center of the State Council conducted a questionnaire survey regarding multinational corporations in China. The survey results show that China's business environment is still good and the confidence of multinational corporations has been restored compared with the period before the international financial crisis, according to the report.

The survey also shows that the operating performance of more than 80 percent of respondents has been restored or even exceeded the level it was at before the international financial crisis. The overall condition of the investment environment in China is regarded as the best among the first four BRICS countries, which refers to Brazil, Russia, India and China.

Meanwhile, some multinational corporations are not accustomed to or are confused with the changes in the Chinese market environment and policy environment. The complaints focus on aspects, such as China's independent innovation policies, merger and acquisition security review on foreign capital, market access barriers and intellectual property protection.

The CDRF said that according to the survey results, some multinational corporations changed their attitudes toward China for multiple reasons, such as more intense competition caused by the rise of Chinese enterprises, flaws in the Chinese economic system, policies that need to be improved as well as misunderstandings caused by political and cultural differences.

In addition, some multinational corporations tend to use "deterioration in the business environment" as an excuse for poor performance that fails to meet shareholders' expectation in the increasing competition in China.

The research foundation said that the total amount of multinational investments in China is still growing and China will remain a driving force in their growth for a long time. Many foreign companies like General Motors have done a better job in China than in their domestic market.

Over 70 percent of the multinational companies surveyed take a positive attitude towards Chinese companies "going global." They think that if Chinese companies "go global," there will be more opportunities for cooperation. For example, some multinational corporations have acquired foreign assets in cooperation with Chinese companies, and some have subcontracted their overseas projects to Chinese partners.

Furthermore, as China has gradually strengthened the protection of intellectual property rights and Chinese companies have made great technological progress, multinational corporations have become more motivated in carrying out technological innovation activities in China. The number of multinational corporations' research and development centers in China reached 3,300 in 2010, which is 16 times the number in 2001.

By Li Jia, People's Daily Online

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