I've been hearing plenty about a worsening business climate in China, but now new survey results from the American Chamber of Commerce in Shanghai (AmCham Shanghai) indicate something different.
As a result, we're getting a more complete picture of the current complex business landscape in China a rocky terrain that includes both increasing competitiveness and the potential for business success.
More than three-quarters of the 218 American companies polled in the survey say that the business environment in China has either improved or stayed the same over the past six months.
65 percent report that their business performance has improved within the past six months despite steadily increasing competition in the China market. Only 10 percent of respondents experienced a decline in business.
Among companies in China that have changed course over the past six months, a strong majority of them have chosen to increase their China investment, manufacturing operations, research and development, hiring, product development and procurement.
However, when asked about the indigenous innovation policy recently announced by the Chinese government, 30 percent of the companies aware of the policy said that the directive would hurt their businesses. Recognizing the potentially disastrous implications of this policy, AmCham Shanghai has asked the U.S. government to engage China on the indigenous innovation policy at the upcoming Strategic & Economic Dialogue meetings in May.
"It is business as usual in China but the environment is becoming more competitive," says Pierre E. Cohade, president of Goodyear Asia Pacific. "With the business climate as positive as ever, the focus is now in China for China.' Successful companies need to continue to invest in building both capacity and capabilities and incorporate best global business practices to thrive in this market."
This survey was conducted from March 24-31, 2010. Of the 218 participating American companies, 48 percent classified themselves as services companies, 46 percent as manufacturers and 6 percent as procurement.
More details are available here.