US firms upbeat about China

US companies in China remain committed to, and highly optimistic about, the long-term prospects of the domestic economy, the 2009 White Paper on the state of American business in China, released yesterday by the American Chamber of Commerce (AmCham), showed.

The country was still a top investment priority for American businesses, the *** said. According to a survey carried out by AmCham, 22 percent of its members said China was their No 1 global investment destination. Between 75 and 78 percent have ranked the country as a top-three investment destination every year since 2004.

Although the outlook for 2009 was considerably less optimistic than responses in recent years, US firms consistently reported being profitable in China. For 2008, 74 percent of members reported being "profitable" or "very profitable", according to the White Paper.

The survey also found that US firms were still confident about their long-term growth prospects in China. Although nearly half of the companies said they were pessimistic about this year's outlook, 63 percent were optimistic about their two-year outlook and over 80 percent were upbeat about five-year prospects.

These trends indicated that the vast majority of US firms here were focused on market opportunities within the country, the *** said.

Almost two-thirds of members indicated they were in China to produce or source goods and services for the Chinese market, rather than for exports. "This number represents a significant increase from 51 percent in 2008, and that shows that most American businesses are for here the Chinese market," said John D Watkins Jr, AmCham-China Chairman.

In addition, two-thirds of US companies in China expected to directly or indirectly benefit from the country's 4-trillion-yuan stimulus package, according to Watkins.