Beijing: US companies in China are being constrained by a host of new regulations restricting their market access, a survey by the American Chamber of Commerce in China shows.
For the first time in the survey's 12-year history, US firms reported that their biggest challenge was "inconsistent regulatory interpretation" on the part of China's government, such as new rules mandating purchases of home-grown technology and irregular enforcement of laws.
In past years personnel issues, such as hiring experienced managers, were top concerns.
"These policies appear to be diminishing the ability of foreign companies to access the Chinese domestic market, right at the time China shifts from being an export-led economy to a more domestic-consumption-led economy," John Watkins, Amcham's chairman, said in a preface to Friday's report.
Censorship issues
The results come days after four China-based executives at Rio Tinto Group were convicted on bribery charges in a Shanghai court and Google shut down its mainland Chinese website over censorship issues.
At the same time, a report released on Thursday by the American Chamber in Shanghai said US companies such as Goodyear Tire & Rubber are positive on China.
On Friday, General Motors said its March sales in China rose 68 per cent from a year earlier to 230,048 vehicles.
The US is seeking to break down barriers to its exports in order to further narrow a trade deficit with China that amounted to $181.4 billion (Dh666 billion) last year and meet President Barack Obama's goal of doubling exports within five years.
Lawmakers such as Sen. Charles Schumer, are proposing tariffs on Chinese imports if the country doesn't raise the value of the yuan.
Affecting businesses
The global financial crisis hurt US businesses in China last year even with the country's 8.7 per cent annual growth, the survey found.
Thirty-one per cent of 280 companies responding to the survey said they had "substantial" or "slight" decreases in revenue in 2009 compared with 2008, and compared with 13 per cent in 2007-2008, and five percent in 2006-2007.
Last year, 44 per cent of 266 companies responding to the survey question said they postponed or cancelled investment plans in China last year. This year, 79 per cent say they plan to increase investment, the survey found.
The China operations of US multinational companies were more profitable than their global operations as a whole.
Forty-six per cent of 240 companies responding said their operating margins were significantly or slightly higher in China than elsewhere, an increase from 35 per cent in 2008.
"It is business as usual in China but the environment is becoming more competitive," Pierre Cohade, president of Goodyear Asia Pacific, said in a statement accompanying the Shanghai Amcham report.
