AmCham South China releases Special Report on the State of the Business in China

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GUANGZHOU, March 12 – The American Chamber of Commerce in South China launched its 2010 special report on the state of the business in South China and a white paper on the business environment in China yesterday.

The special report details the results of a study conducted by AmCham South China among their members from December to February 2010, with the aim of reporting the pulse of the current economic situation. It also presents an in-depth economic overview of the Guangdong, Fujian, Guangxi, Hainan, Hong Kong and Macau provided by the foreign investment consulting firm Dezan Shira & Associates.

Rosario Di Maggio of Dezan Shira with AmCham South China President Harley Seyedin

Of the 405 members that answered the questionnaire, around 80 percent of them are headquartered in Guangzhou or Shenzhen and have their parent or holding company whether in the United States (45.6 percent), in Hong Kong (18.3 percent), Mainland China (14.3 percent) or Europe (11.1 percent). An interesting trend reported by the study, especially if compared with the past years result, is the increasing number of companies defining their “primary focus of your business activities in China” as “providing goods or services to Chinese market” (up 71.1 percent this year from 46 percent in 2006) against “manufacturing primarily for export” (28.9 percent).

Other interesting insights emerging from the study included:

  • Labor market trends; over 80 percent of the companies that answered the questionnaire report to have “taken advantage of the current labor market by hiring new employees”, with AmCham estimating approximately 429,000 new hirings in 2009
  • Investment budgets for 2010; foreign enterprises appear to have increased by 44 percent, nearly recovering to pre-financial crisis levels (although 3-year budgets lag in recovery)
  • Regulatory issues, local competition and rising labor costs topped the list of current and future (over the coming three years) challenges that could hinder or limit opportunities for growth as perceived by the participants

The white paper covers the 30 years of China’s growth, its innovations and current situation as well as China’s relation with the United States. It also urges the Chinese authorities to simplify the regulatory framework and make it easier for foreign companies to do business in China.

Both the special report and the white paper are available for download on the chamber’s web site.