US firms confident over China growth

US businesses in the Chinese market are maintaining strong growth momentum despite a slowdown faced by the world's second largest economy, according to the results of a survey released Wednesday in Washington DC by the US-China Business Council (USCBC).

Two-thirds of the US companies surveyed said their business revenues in the Chinese market rose 10 percent or more over the past year (2011), while 75 percent reported their profit margins from China operations are on par with or better than their global average level, the USCBC, a lobbying group consisting about 240 US firms doing business in China, said in its latest annual survey of China's business environment.

"The latest results showed that China remains a land of promise for US investors," He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times Thursday.

US firms' investment in the Chinese market is actually way higher than the Chinese government's figures on foreign direct investment (FDI), according to He, who revealed that the FDI reading only measures capital flows from overseas, not including foreign firms' reinvestment from within the country.

During the first eight months, the FDI from the US into China fell 2.85 percent compared to an average 3.4 percent decline in China's actualized FDI, according to data from the Ministry of Commerce.

While noting the positive growth, the lobbying growth also pointed to some barriers to the US firms' ability to capitalize on the opportunities in the market of the world's second largest economy.

"Company optimism is tempered by rising costs, domestic competition, and continuing regulatory and market access barriers," John Frisbie, president of the USCBC, said in a statement sent to the Global Times Wednesday.

"Although 90 percent of respondents said they are optimistic or somewhat optimistic about business prospects over the next five years, a sizeable number, 45 percent, said they are less optimistic than three years ago," Frisbie said in the statement.

Such concerns echoed similar views expressed by the American Chamber of Commerce in China (AmCham China) in its annual China business survey released in March.

A majority of respondents surveyed by AmCham China said they plan to increase investment in China in 2012, but many are now seeing tempered growth prospects due to economic slowdown and rising labor costs, according to AmCham China.

"But overall the country continues to offer opportunities for foreign firms especially in the fields such as services, technology and logistics that could generate more added value," He of China-US-EU Study Center noted.

However, the Chinese government needs to further streamline its regulatory framework to facilitate foreign investment, he said.

Administrative licensing hurdles are among the top concerns for the US companies surveyed by the USCBC.

China's State Council announced Wednesday a list of items which will no longer be subject to administrative approval, in a move to further encourage investment and liberalize the economy.