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Most US companies making profits in China
By Dai Yan (China Daily)
Updated: 2004-09-17 08:37

Twice the number of US companies are planning to expand business in China compared with last year, according to the American Business in China White Paper.

The report by the American Chamber of Commerce in China (AmCham-China) and AmCham Shanghai said US businesses are satisfied with the performance of their China operations and optimistic about their future, which is a result of China's ongoing opening up of its market to foreign investors.

The report indicates that 16 per cent of the 238 survey respondents said their businesses in China are very profitable and another 57 per cent said their businesses were profitable.

"For the second year in a row, our research shows that our members remain bullish on the China market, with twice the number planning to expand their businesses in China compared to last year," said AmCham-China Chairman Jim Gradoville.

Nearly two-thirds of the companies surveyed said that although the Chinese economy was seen to be growing too fast, they were confident that the central government would be able to engineer a soft landing.

More products will be exported and imported by these companies. Plans also call for companies to expand more operations into interior provinces and beyond secondary cities, the report said.

Only a third will be increasing equity in joint ventures, underscoring the trend in recent years towards wholly-owned enterprises, the report said.

"Implementation of WTO commitments was a key ingredient in this newly positive sentiment," said Gradoville.

From mid-2003 to mid-2004, China made progress in implementing its WTO commitments, including the issuance of regulations in the areas of trading rights, insurance, auto finance and agriculture.

Also, the invitation for American companies to comment on selected draft laws set a good precedent, one that the companies hope will continue, the report said.

US firms remain upbeat about the benefits of the WTO, with 61 per cent of AmCham companies surveyed for the White Paper reporting that China's entry into the WTO has had a positive impact on their business.

"The Chinese authorities are to be applauded for fulfilling their WTO commitments. We all recognize the value in doing this in a timely manner and the AmCham will continue to work with their members and the government to keep this process moving forward," said AmCham Shanghai's Chairman Phil Branham.

The White Paper is sharply critical of the United States Government's visa policies, which it says are costing American companies billions of dollars every year.

It calls on the US Government to better balance commercial and security needs, increasing head-counts and funding for non-immigrant visas functions in China while seeking continuous productivity improvements, refining criteria for security reviews and improving decision-making transparency.

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