U.S.
firms' optimism on China ebbs, wary of local rivals: survey
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[September 27, 2014]
WASHINGTON (Reuters) - U.S.
companies are increasingly less optimistic about the business outlook in
China, and see growing competition from local rivals who get
preferential treatment as a key challenge, a survey showed on Friday.
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A US-China Business Council survey of senior executives at its
200-plus member companies showed ebbing optimism about the five-year
business outlook for China, which is grappling with slowing economic
growth.
The 2014 survey, which will be formally released on Monday, showed
31 percent of respondents were "optimistic" about the mid-term
outlook, compared with 39 percent in 2013, although the share of
those saying they were "somewhat optimistic" rose.
Eighty-three percent said their Chinese operations were profitable,
down from 91 percent in 2013. Half planned to increase resources
invested in China in the next 12 months.
The number one challenge U.S. companies faced in doing business in
China was competition from domestic rivals, the survey showed,
followed by enforcement of intellectual property rights and foreign
investment restrictions.
"Optimism continues to be tempered by policy uncertainty," USCBC
President John Frisbie said in a statement.
The organization's members include Chevron Corp <CVX.N>, IBM Corp
<IBM.N>, Google Inc <GOOGL.O> and Wal-Mart Stores Inc <WMT.N>.
Most of those surveyed thought Chinese competitors, both state and
privately owned, received benefits that foreign companies did not,
such as preferential financing or tax benefits. Competition from
domestic companies was also seen as the main restraint on profits,
followed by rising costs.
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Almost nine in ten companies were at least somewhat concerned about
China's antitrust laws. Regulators have investigated dozens of
foreign companies over alleged anti-competitive behavior, and almost
one in three USCBC members were worried they would be subject to an
investigation.
(Reporting by Krista Hughes. Editing by Andre Grenon)
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