Editor's Note:

January 27 marks the 50th anniversary of the establishment of the Sino-French diplomatic relations. China has changed dramatically over the past half century, especially with the dazzling rise of its economy to reach 56.9 trillion yuan ($9.3 trillion) in 2013, 156 times the size in 1978 when China initiated the reform and opening-up policy. China has become a major market for many foreign investors including French businesses. The country's new leadership has recently unveiled new reform plans to further unleash market power. On the occasion of the 50th year of Sino-French friendship, the Global Times interviewed senior executives of French companies in China, revealing their insights on the market evolution over the past years, and the emerging opportunities and challenges China's new reform blueprint will bring to them.


Major challenges seen ahead in China for foreign businesses

Olivier Guibert

The business environment is challenging for foreign companies in China as economic growth slows down, with rising labor costs and strong competition from local companies, the head of the French Chamber of Commerce in China (CCIFC) told the Global Times during a recent interview.

"One factor is related to the economic growth, the slowdown is happening already in some sectors," said Olivier Guibert, chairman of the CCIFC.

"There are concerns about human resources, including rising labor costs in a very significant manner, especially in the eastern part of China. It is getting difficult to hire the people for specific functions, make them grow, and be sure they continue working for you," Guibert noted.

2013 in China was more competitive and more challenging than ever, as few member companies reported an increase in revenues and profits compared with three or four years ago, he said.

However, it doesn't mean that China is no longer attractive, as China moves from export and investment-led growth to high-tech and a consumption-driven model, according to him.

"China is looking to develop the health, agribusiness and high-tech sectors. These industries and sectors bring more opportunities for French firms which will probably grow faster due to having some advantages," he noted.

A major concern among the member companies is the strictly regulated market.

China's reform blueprint to make market play a decisive role is "going the right direction," and "what we expect is that the economy will be much more market-driven and more accessible to public procurement," said Guibert.


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