采访/易如 编辑/王子琦 后制/孙宁
New Report: the Enthusiasm of US Investment in China Waned
A report of US enterprises in China showed that the
enthusiasm for US investment in China weakened.
The main reasons include increasing costs, China’s economic
slowdown and perennial market access barriers, etc.
How can the passion of swarms of foreign investors wane in
just a few years?
Let’s listen to the expert’s analysis.
According to the media, the US-China Business Council
released a report on Thursday showing that the number of
companies who put China as the most important overseas
market continues to decline.
This year, only 15% of respondents named China as the most
important overseas market, while it was 22% last year.
Meanwhile, only 52% of enterprises intend to expand in
China in the coming year, while it was 67% one year ago.
The report also listed ten challenges for
American enterprises in China.
The top three are increasing costs, competition from
local enterprises in China and administrative registration.
USA, University of South Carolina, Aiken Business School
Professor, Xie Tian: It is well known that there are
two reasons for rising costs.
One is labor costs are increasing which is mainly because
of inflation being too severe.
The other is wages are rising.
Chinese local enterprises competition implied rampant
counterfeit and piracy mean the foreign product can’t
compete fairly against fake products.
This is the biggest problem involving property rights.
In the past few years, China’s labor costs’ have grown in
double digits causing some U.S. manufacturers to
move away from China.
From 2011 to 2012, the biggest problem for US enterprises in
China was the difficulty in finding the right talent.
The 28th February, Shanghai American Chamber of Commerce
released the 2012-2013 China Business Report showing the
main reasons of US enterprises consecutive two years sliding
profitability in China are increasing labor costs increasing
and China’s economic slowdown.
In addition, the high rental costs make some foreign
businesses close down after years of operation.
June of this year, the US Starbucks coffee group closed a
store in Beijing International Shopping Mall.
This was the first Starbucks store in China mainland.
Some media estimates state that the Starbucks international
store has more than 7 million yuan in rental and
labor costs in per year.
The rent may be doubled and even has a corresponding rise.
In March, McDonald’s closed a store at Chang An
Shopping mall in Beijing.
The global retail giants “Carrefour" has closed at least six
stores in China in the past three years.
Xie Tian pointed out that the administrative registration
challenge exists, because of rigid system and
bureaucratic corruption in China.
To succeed in China, foreign companies have to participate
in bribery everywhere to make it through.
This is illegal in Western countries.
In addition, it is reported that the companies surveyed have
suffered unfair treatment from the communist authorities
in competing with local enterprises in China.
Xie Tian: Since the communist authorities favor its
state-owned enterprises, China’s private enterprises,
small and medium enterprises are also affected by injustice.
The discrimination is not only in policy, but also bank
loans and regulations, administrative officials and
local officials’ connections.
You can find different treatment everywhere.
August 21, British Reuters quoted sources saying, the China
Development and Reform Commission convened with about 30
foreign companies to confess their monopolistic behavior and
warned that their fines would be double if they resisted.
China financial analyst Ren Zhongdao pointed out that the
Chinese Communist Party is bullying.
China financial analyst Ren Zhongdao: the problem we are
discussing now is that the politics turn “left" and
economics turn “right".
The economics turn “right" means we have to undergo economic
reform because there is no way out.
Without economic reform, economic collapse will lead to
the collapse of the regime.
In 2011, for foreign companies including medicine, milk, and
some imported vehicles, the CCP is preventing
them from acting as a monopoly.
It stirs up nationalist feeling of antitrust and there might
be unfair treatment.
Xie Tian said that the problem appearing recently is because
of China’s overall economy is rapidly deteriorating.
With these problems increasingly surfacing, the enthusiasm
for foreign investment has been greatly diminished.