The American Chamber of Commerce in China released its annual business climate survey on Tuesday, and the results indicate that the business climate is improving and quite favorable to their members.
Among the key findings:
1) Companies that reported being "very profitable" jumped from 6 to 13% between the 2010 and 2011 surveys. The total proportion of profitable companies rose from 71 to 78% during this time. Only 6% of companies said their revenues went down in 2010.
2) 61% of companies produce in China primarily for the Chinese market, and do not use China as an export platform (18%).
3) Chinese protectionism is a worry for a significant proportion of members (23%), but just as many or more are worried about labor costs (23%), a global economic slowdown (27%), and a slowdown in China (31%). 26% say their firms are being harmed by China's Indigenous Innovation policies, compared to 68% who feel no effect and 6% who say the policy has helped them. 30% of respondents said they believe enforcement of intellectual property rights is "effective," up from 26% in 2010.
In short, it appears that although operating in China is difficult and a variety of industrial policies are presenting new challenges, the overall market is growing fast enough such that incomes are growing and the pain of these industrial policies is still not acute for most foreign companies.
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