AmCham South China Launches Special Report

March 4, 2009 Posted by China Briefing Reading Time: 2 minutes

GUANGZHOU, Mar. 4 – The American Chamber of Commerce in South China launched its annual, 2009 Special Report on the State of Business in South China, compiled in cooperation with Hewitt Associates and Dezan Shira & Associates.

The report provides an overview of the economy of Southern China, its progress and development and the challenges of the individual companies operating in the area (click on the picture to download the report).

For this year’s report, 551 companies participated in the survey. The results show that companies have substantially lowered investment budgets – a decrease of as much as 50 percent compared to last year’s.

Majority of the respondents said that the global economic
crisis had a significant effect in the country and abroad. During the time this survey was executed, 72 percent of companies reported being profitable while an additional 7 percent estimated that they be profitability this year and 12 percent more expecting to be profitable within the coming two years. Overall, almost 92 percent of respondents said they are were already profitable or will be by 2011.

The report also shows that although profitability rates remained consistent, profitable companies not meeting budget expectations rose by 13 percent since 2007. However, 70 percent of the respondents felt that the business environment had improved in the preceding 12 months and more than 85 percent answered that the business environment was “good/acceptable,” “very good” or “outstanding.”

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

“During these times, reports like these are essential for foreign investors to be able to analyze the current market,” said Rosario Di Maggio, a senior associate with Dezan Shira & Associates’ Guangzhou office. “The companies that participated in this year’s survey provides a general picture that includes some really interesting trends for the business community working in Guangdong Province.”

The most striking difference was seen when companies were asked about their target market, 72.5 percent answered that providing goods or services to the local market was their top objective. This is in comparison to last year’s 57.5 percent, indicating that businesses are shifting from the export market to the domestic market.

Businesses also cited reasons for setting up operations in South China because of it’s perceived openness, proximity to Hong Kong and developed infrastructure compared to other parts of the country and because of the availability of qualified managers and specialists.