US Companies Plan Expansion in China but Worried about Regulatory Obstacles

AP reports on a survey that found that U.S. businesses are feeling financially confident enough to again expand in China, but that they may have some hesitations in doing so:

An annual survey released by the American Chamber of Commerce in China showed that U.S. companies performed well in the past year, returning to pre-financial crisis levels of profitability. The vast majority — 83 percent of respondents — plan to increase their investment and expand operations in China.

At the same time, the report said businesses expressed major concerns with bureaucracy and regulatory uncertainties in China that favor domestic companies, and voiced increased pessimism that economic reforms can improve the working climate.

“One part of the story is that American companies are doing well and profitability is back to where it was before the financial crisis. But the second part is that companies have some real concerns about some elements of the regulatory environment,” said the group’s chairman, Ted Dean.

In particular, U.S. companies reported that regulatory barriers, including licensing difficulties and innovation policies that favored Chinese companies over foreign counterparts, were problematic to their future growth.

March 21, 2011 11:13 PM
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