China Offers Poor Business Climate For US Firms: Survey

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China is not a great place to do business these days. According to a recent report from the American Chamber of Commerce in the People’s Republic of China, the business climate in China has slipped appreciably. So much so, in fact, that a significant majority of U.S. business executives feel they are being “targeted” by the Chinese government.

Many of the respondents noted that the growing anti-U.S. sentiment in China seems to be related anti-monopoly and anti-corruption campaigns President Xi Jinping launched a year or so ago.

More details on the survey

The 2015 AmCham China survey noted that 57% of the 477 survey respondents reported that foreign firms are being targeted in the new campaigns of President Xi Jinping. Of note, most U.S. business execs claimed  intensified internet censorship and increased government probes of the company as the reason they felt targeted. More than half of those who reported being targeted say that their business has been negatively impacted by the targeting of the Chinese government.

Almost half of the survey respondents noted that they feel “less welcome” than ever before in China.

A solid 53% cited air pollution as a major problem in hiring senior executives to work in China. This figure is 10% greater than 2014 and 56% higher than in 2013. The report notes that quality of air in China is negatively impacted by coal-burning power plants and vehicle exhaust. Some estimate that more than 500,000 people are killed each year due to pollution in China.

Stricter online regulations are also impeding businesses in China, as 83% of those surveyed said their business operations had been negatively impacted by increasing internet censorship.

The weakening economic situation in China was also perceived as a problem, with more than 30% of those surveyed not planning to make additional investments in China this year.

Survey respondents also mentioned labor costs, inconsistency in regulations and a lack of fully-qualified employees and top-quality management.

Statement from chairman of AmCham China

“All of us are concerned, because we’re on the sidelines for the most part, watching and monitoring the campaigns by Xi Jinping and the leadership,” AmCham China chairman James Zimmerman commented in a news conference publicizing the survey results. “We don’t know if it’s going to slow down, or who is going to be targeted next.”

Chinese authorities maintain that their anti-monopoly laws are applied fairly and do not discriminate between domestic and foreign firms.

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