上海美国商会-2018年中国商业报告（中英文）-2018.7-68页-2mb

2018 China Business Report Summary

Core Content

The 2018 China Business Report by the American Chamber of Commerce in Shanghai (AmCham Shanghai) provides an overview of the performance, investment strategies, and challenges faced by U.S. businesses operating in China. The report is based on the annual China Business Climate Survey, which was conducted between April 10 and May 10, 2018, and received responses from 434 companies. It highlights the ongoing trade tensions between the U.S. and China, particularly in the context of the Trump Administration's Section 301 investigation and the potential for tariffs, while also emphasizing the resilience of U.S. businesses in the Chinese market.

Main Points

Business Performance

• Profitability: 76.5% of companies were profitable in 2017, slightly lower than 76.9% in 2016. However, 6% more companies reported "very profitable" results in 2017 compared to 2016.
• Sector Performance:
  • Manufacturing (83%) and Retail (81%) were the most profitable sectors.
  • Services (65%) lagged behind, with a 7% decline in profitability.
• Revenue Growth:
  • 57.7% of companies reported higher revenue growth in China than globally, up 7.7% from the previous year.
  • Chemicals (81%) and Pharmaceutical, Medical Devices, and Life Sciences (79%) were the top performers.
  • Retail (70%) and Manufacturing (64%) led in higher growth compared to global revenue.
• Contribution to U.S. Operations: 25% of companies reported that their China operations significantly contributed to U.S. head office profits, while 20% said they added to U.S. production and employment.

Investment Trends

• Investment Plans: 61.6% of companies expected to increase their investment in 2018, up from 53% in 2017.
• Priority:
  • 27% of companies listed China as their number one investment priority.
  • 30% listed it as their second to third priority.
  • 37% listed it as one among many investment destinations.
• Investment Shifts:
  • 81% of companies reported no redirection of investment from China to other locations.
  • Those that did redirect investment mainly went to Southeast Asia (9%), the United States (6%), and the Indian Subcontinent (4%).
• R&D and Automation:
  • 32% of companies increased R&D investment, up from 26% the previous year.
  • 26% of companies increased automation and productivity development, up 5% from the prior year.
  • Manufacturers led the increase in R&D and automation investments.

Challenges

• Regulatory Environment:
  • 60% of companies found China's regulatory environment lacking transparency.
  • Lack of IPR protection and enforcement (61.6%) and obtaining required licenses (59.5%) were the top regulatory challenges.
• Operational Challenges:
  • Rising costs (95.6%) and domestic competition (85.7%) were the greatest concerns.
• Cybersecurity Law:
  • 41% of companies said the law prevented them from leveraging global systems.
  • 31% had to establish local data centers and cloud presence.
  • 28% said the law made them less willing to bring data into China.
• Government Policies:
  • Made in China 2025 and other industrial policies favored local companies, creating an uneven playing field.
  • Technology transfer pressure was significant in strategically important sectors such as aerospace (44%) and chemicals (41%).
  • VPNs policies made work more difficult for 56% of companies.

Policy Environment

• Reciprocity and Trade Policy:
  • 41.5% of companies favored using investment reciprocity as a tool for greater market access, up from 40.3% in 2017.
  • However, opposition to reciprocity increased to 15.7%, nearly double the 8.6% from the previous year.
• Tariffs:
  • Only 8.5% of companies supported the use of retaliatory tariffs, while 69% were opposed.
• Belt and Road Initiative (BRI):
  • 36% of companies expected to indirectly benefit from BRI, 29% expected no benefit, and 16% believed they would directly benefit.

Key Industry Highlights

• Top Performing Sectors:
  • Chemicals (93% profitable) and Automotive (89%) were the top performers.
  • Pharmaceuticals, Medical Devices, and Life Sciences (93%) also saw strong performance.
• Struggling Sectors:
  • Legal Services (50%) struggled to make profits.
  • Real Estate, Engineering, and Construction Services (53%) also had low profitability.
• Technology Sector:
  • Technology Hardware, Software, and Services saw the biggest increase in producing and sourcing "in China, for China," jumping 44% to 68%.
  • Cybersecurity laws and the emphasis on "domestic" suppliers influenced this trend.

Conclusion

Despite the ongoing trade tensions and regulatory challenges, U.S. companies continue to invest in China, driven by market opportunities and the country's growing middle class. While there are signs of slight improvements in IPR protection and data security, the overall regulatory environment remains a concern. The report underscores the need for a more balanced and reciprocal trade relationship to ensure long-term benefits for both U.S. and Chinese businesses.