US firms maintain optimistic China outlook

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The healthcare industry has the highest level of confidence in the China market among US enterprises while the majority of them feel optimistic regarding their five-year outlook despite the economic slowdown, according to the 2015 China Business Report released by the American Chamber of Commerce in Shanghai on Wednesday.

The healthcare sector shows the optimism resulting from the growth of China’s growing middle class, increasing urbanization, and Chinese government policy priorities and spending.

“The growth of population and the emergence of a richer middle class will enlarge our market with their increasing needs for high-quality medical treatment in the next five to 10 years,” said Shirley Zhao, president of Allergan, a US healthcare giant that entered the China market over two decades ago.

The report is based on the results of the annual China Business Climate Survey, which began in 1999 and reflects the views and insights of 377 member companies.

Nearly one-third of US companies reported that China is their top global investment priority, while 96 percent of companies surveyed reported that they had maintained or increased investment levels in China operations in 2014.

“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 businesses,” said Kenneth Jarrett, president of AmCham Shanghai.

There was no change in the ranking of top business challenges facing US companies with the top being rising costs, which increased from the previous year’s 48 percent to 53 percent in 2014.

Over 90 percent of respondents indicated that rising costs was their number one business challenge, while the cost of labor remains the most significant concern, with 86 percent of companies reporting this as their primary cost issue, said the report.

“Many foreign companies in China are starting to find themselves ‘stuck’ between a slowing economy and a still-challenging commercial environment,” said Kent Kedl, Greater China managing director for Control Risks, AmCham Shanghai’s partner for the report.

Companies ranked the top regulatory challenge in 2014 as an unclear regulatory environment, with 78 percent of respondents claiming it had hindered their business in China. A total of 33 percent reported that a lack of regulatory transparency has held them back, an increase from the previous year’s 26 percent and a historic high for the category.

“Many companies are growing at a slower rate and still need to deal with the difficulties of the lack of transparency and corruption issues in China,” said Kedl.

 

 

Source : China Daily | March 4, 2015

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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