90% of U.S. companies in China profitable
August 29, 2016 Category Foreign investment, Weekly
Despite China’s economic slowdown and increasing competition from local companies, most U.S. businesses in China remain profitable and are optimistic about the market, according to the latest survey by the U.S.-China Business Council (USCBC). The 2016 China Business Environment report found that 90% of companies remained profitable, but at lower margins that reflected increasing competition, rising costs, regulatory hurdles, and in some sectors, overcapacity. The 90% profitability level is the second highest in the last five years, surpassed only by the 91% in 2013. About 30% of the companies expected increased profitability in the current year, while 35% expected the same as the previous year. The remaining 35% expected profitability to fall. The report found that some 62% of the surveyed companies anticipated continued growth this year, 21% expected no change, and 17% expected a revenue decline. It found that 65% of companies surveyed reported revenue increases in 2015, while 10% saw no change, and 26% saw sales fall. About 36% of the companies expected their head count to increase this year, while 44% expected no change. On the five-year outlook for business in China, optimism prevails. The findings were that 72% of companies were optimistic or somewhat optimistic, while only 10% were pessimistic or somewhat pessimistic, the China Daily reports.
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