US firms look to China marketEighty-eight percent of 130 US companies operating in China say they would like to expand their businesses, according to the second American Business in China White Paper.The white paper was released recently by the American Chamber of Commerce in China (AmCham-China). It records the results of a survey done last summer among the chamber's 600 member companies in China. Of the 130 companies that responded, the majority were firms with 50 or fewer employees in China. Although most companies find China a difficult market in which to operate, they are cautiously optimistic about China's ability to improve its business environment. Sixty-five per cent respondents said they believe the rule of law will be strengthened in day-to-day business in China within two years; 51 per cent said they expect operating conditions to become easier; 40 per cent said IPR protection will be better; and 57 per cent said renminbi loans will be easier to obtain in the next two years, the white paper reported. The commitment of US investors to China is illustrated by the 12 per cent rise in US-sourced foreign direct investment from 1998 to 1999 in the face of the first drop in foreign direct investment inflow into China in recent years. Official Chinese statistics indicated that actually utilized foreign direct investment in China dropped 11 per cent year-on-year to US$40.4 billion last year. The US companies said they were confident that China's anticipated accession to the World Trade Organization (WTO) would boost investors' confidence by reducing market access restrictions - the most significant problem facing US companies oeprating in China today - and by providing a solid framework for long-term US-China commercial relationships. "It (China's accession to WTO) will benefit the United States because it will foster a more transparent and predictable business enviornment in China and dramatically expand market access in China for US goods, services and farm products," said AmCham-China Chairman Timothy Stratford. He urged the US Congress to grant permanent normal trade relation status to China. "Or else - under WTO rules - China will be allowed to single out US companeis for discriminatory treatment," Stratford said. At present, US firms operating in China regard market access restrictions, high taxes and customs duties, high costs and slow market development as the top barriers to profitability. |
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