The European Union Chamber of Commerce in China launches its seventh annual European Chamber Business Confidence Survey, which is published in partnership with Roland Berger Strategy Consultants. It surveyed over 500 European companies based in China between March and April of 2010. The results the most comprehensive and wide-ranging set of data yet gathered for this annual publication show a European business community that remains optimistic about surging economic growth, but concerned about uncertainty in the business environment and ongoing regulatory unpredictability.
The 2010 Survey findings show that European businesses in China are generally optimistic about growth in their business sector they have seen the Chinese market recover strongly and anticipate that this impressive performance will create opportunities for their own industries. As a result, European companies report that China has become an even more important element of their global business strategies.
However, this expected optimism about growth does not automatically translate into confidence in China as a sustainable and predictable investment environment in the long term. Instead, what the survey results present is a more complex picture in which optimism in the overall economic climate has been dampened dramatically by concerns about regulatory interference and unpredictability in the market. The vast majority of respondents believe that regulations affecting business conditions for foreign-invested companies will not become fairer in the near future.
Jacques de Boiss son, President of the European Chamber, commented, Our members are confident about market growth in China and are backing this up with strategies based on investment and market-share expansion. However, they are concerned about an unpredictable regulatory environment that constrains their ability to compete. The discretionary enforcement of laws and regulations, opaque and burdensome registration processes as well as concerns regarding the protection of intellectual property rights continue to be top concerns for European business in China. These persisting regulatory challenges temper the attractiveness of China as a long-term investment destination. Our member companies continued commitment to China as an investment location is not unconditional and would be further bolstered by a clearer and more predictable business environment.
Charles-Edouard Bou e, Asia President of Roland Berger Strategy Consultants, said, The results of the survey clearly show that European companies are confident about China's growth perspective and that the Chinese market offers many opportunities. But growth is only one side of the coin. In the long run it is profitability that determines the success of a company. Currently, only about one-third of the respondents are optimistic about their profitability prospects. One factor impacting this sentiment is rising competition. As the Chinese market matures, so do domestic competitors, who are perceived to be a risk for future business by 58% of respondents. European companies need to "raise their game" in China and continue to differentiate their products and services in this complex market. To that end, we hope that the report helps businesses gain insights that support their strategic planning and tactical decision-making.
Following the launch, the European Chamber will present the findings from the European Chamber Business Confidence Survey 2010 to government and regulatory agencies in China, to the European Commission and EU Member State Governments, and to a wide range of business organisations and companies in China and Europe.
Key findings of the European Chamber Business Confidence Survey 2010:
* 78% of respondents reported optimism regarding growth in their sector over the next two years; while only 34% reported optimism about profitability in their sector for the same period.
* Some 49% of respondents reported that China has become a more important market for them, while only 4% say China has become less important to their overall strategy; 47% say there has been no noticeable change.
* 30% of members highlight China as the top investment destination for them today, with another 34% identifying China as a Top 3 destination.
* 36% of respondents perceive the government policies affecting the business environment toward FIEs as having become less fair over the past 2 years. Additionally, 39% expect government policies affecting FIEs in China to become less fair toward FIES.
The 2010 Survey findings show that European businesses in China are generally optimistic about growth in their business sector they have seen the Chinese market recover strongly and anticipate that this impressive performance will create opportunities for their own industries. As a result, European companies report that China has become an even more important element of their global business strategies.
However, this expected optimism about growth does not automatically translate into confidence in China as a sustainable and predictable investment environment in the long term. Instead, what the survey results present is a more complex picture in which optimism in the overall economic climate has been dampened dramatically by concerns about regulatory interference and unpredictability in the market. The vast majority of respondents believe that regulations affecting business conditions for foreign-invested companies will not become fairer in the near future.
Jacques de Boiss son, President of the European Chamber, commented, Our members are confident about market growth in China and are backing this up with strategies based on investment and market-share expansion. However, they are concerned about an unpredictable regulatory environment that constrains their ability to compete. The discretionary enforcement of laws and regulations, opaque and burdensome registration processes as well as concerns regarding the protection of intellectual property rights continue to be top concerns for European business in China. These persisting regulatory challenges temper the attractiveness of China as a long-term investment destination. Our member companies continued commitment to China as an investment location is not unconditional and would be further bolstered by a clearer and more predictable business environment.
Charles-Edouard Bou e, Asia President of Roland Berger Strategy Consultants, said, The results of the survey clearly show that European companies are confident about China's growth perspective and that the Chinese market offers many opportunities. But growth is only one side of the coin. In the long run it is profitability that determines the success of a company. Currently, only about one-third of the respondents are optimistic about their profitability prospects. One factor impacting this sentiment is rising competition. As the Chinese market matures, so do domestic competitors, who are perceived to be a risk for future business by 58% of respondents. European companies need to "raise their game" in China and continue to differentiate their products and services in this complex market. To that end, we hope that the report helps businesses gain insights that support their strategic planning and tactical decision-making.
Following the launch, the European Chamber will present the findings from the European Chamber Business Confidence Survey 2010 to government and regulatory agencies in China, to the European Commission and EU Member State Governments, and to a wide range of business organisations and companies in China and Europe.
Key findings of the European Chamber Business Confidence Survey 2010:
* 78% of respondents reported optimism regarding growth in their sector over the next two years; while only 34% reported optimism about profitability in their sector for the same period.
* Some 49% of respondents reported that China has become a more important market for them, while only 4% say China has become less important to their overall strategy; 47% say there has been no noticeable change.
* 30% of members highlight China as the top investment destination for them today, with another 34% identifying China as a Top 3 destination.
* 36% of respondents perceive the government policies affecting the business environment toward FIEs as having become less fair over the past 2 years. Additionally, 39% expect government policies affecting FIEs in China to become less fair toward FIES.
Source: Lifeofguangzhou.com
