(ECNS) -- Chinese-funded companies in the United States are facing shrinking profit margins due to high labor cost, according to a new survey report and white paper for 2015 released by the China General Chamber of Commerce – USA (CGCC) in New York on Tuesday.
In 2015, the CGCC surveyed more than 300 member enterprises that had a leading position in investment or were influential in their respective field and received 122 effective feedbacks. These Chinese companies came from a variety of industries, including services, manufacturing, resources and energy.
An increasing number of Chinese firms reported profit margins from U.S. operations to be lower than their global average in 2014. Compared to the previous year, the proportion of companies that enjoyed similar margins in the U.S. and global markets dropped by 14 percentage points.
In the 2015 survey, 60 percent of respondents said high labor cost posed the biggest challenge for Chinese companies in the market.
The biggest motivation for mergers and acquisitions was market expansion, but 83 percent of those surveyed admitted cultural conflicts of various degrees. Other challenges included economic slowdown, visa and migration policy barriers, high taxes, shortage of management personnel and complicated laws.
CGCC Chairman Xu Chen said the report focuses on the analysis of challenges faced by Chinese-funded enterprises in the U.S. and are aimed to provide feasible suggestions to investors and government agencies working to continuously improve the investment environment.
The latest CGCC white paper showed that China overtook Canada as thelargest trade partner of the U.S. by November 2015. In that year, Chinese companies created more than 80,000 jobs in the country and while its direct investment surpassed $10 billion for the third consecutive year.
Xu expects more fund flows, personnel and technology exchanges as well as economic cooperation between the two countries in future.
