U.S. Companies In China Flourishing Despite Trade Dispute

Despite ongoing bilateral trade disputes, U. S. companies in China are profitable according to an American Chamber of Commerce survey released Feb. 16.

About three-quarters of companies surveyed were making a profit.

The companies are gaining more access to domestic markets and are finding it easier to set up wholly foreign-owned enterprises, according to the survey of half of the chamber's 900 member companies. Sixty percent of the companies surveyed last year said they had a wholly foreign-owned enterprise in China, compared with just 33% in 1999, reflecting loosening restrictions that required firms to have joint ventures, according to the survey.

Companies in recent years have also been able to introduce more products and services to the Chinese market, according to the survey.

Additionally, companies surveyed noted improvements in China's bureaucracy, regulations, transparency and consistency in regulatory interpretation, although they noted there were still problems in these areas.

Difficulty finding skilled workers, especially management-level workers, and the rising cost of human resources, was instead cited as a top challenge. Some 41% of companies report being negatively affected by increased wages.

More than 80% of respondents now cite the Chinese market as their main reason for doing business in China, compared to 6% in 1999.

Poor intellectual property rights, however, caused 44% of the companies surveyed to slow or reduce investment in research and development in China.

Copyright Agence France-Presse, 2006

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