Members of the American Chamber of Commerce in South China expect their investment budgets to total more than USD16.5 billion over the next three years, representing an increase of 40% on the previous three years. Despite a sluggish global economy, member companies in the region expressed strong confidence in the market and in China’s economic reforms, according to a survey. The poll asked 425 companies to predict their projected investment spending between 2013 and 2015. The Chamber has more than 2,000 corporate and individual members in the southern Chinese region. “Enterprises simply do not invest such vast amounts of money and effort in a business environment they deem to be uncompetitive or even particularly hazardous,” said Harley Seyedin, President of AmCham South China. “We estimate members hired in excess of 693,000 new employees over the course of 2012 and one very clear trend has been for participants to increasing their focus on the domestic market, rather than on exports.” The survey showed that in 2006, only 35% of companies were primarily focused on serving the Chinese mainland market with goods or services, while 80.5% now consider it their top priority in 2013, compared with 70% last year. Just under 90% of participants to the survey ranked the region’s business environment as “good/acceptable”, “very good” or “outstanding”, while 47% felt it had improved over the past 12 months against 23% who felt it had worsened. 95% of the participants reported either being profitable already or expecting to reach profitability within two years. The list of major concerns is topped by “regulatory issues”. Other major concerns included local competition, rising labor costs, and a lack of skilled and general employees. It was the ninth consecutive year the survey has been conducted. Guo Yuanqiang, Director General of the Guangdong Provincial Department of Foreign Trade and Economic Cooperation, promised to improve the legal rights of foreign investors, and accelerate infrastructure improvements, the China Daily reports.

91% of U.S. companies in China are optimistic over the outlook for their Chinese operations because of the growing importance of the domestic market, but for the second year in a row their business performance fell in 2012. According to the 2012-2013 China Business Report by the American Chamber of Commerce in Shanghai, only 73% of the U.S. companies in China were profitable last year, declining from 78% in 2011 and 79% the year before. For the second straight year, American firms saw a dip in year-on-year performance indicators, including profitability, revenue and operating margins, the survey said. “We should no longer expect China’s economy to grow at the same double-digit rates of years past,” said Brenda Foster, President of AmCham Shanghai. “Steadily rising costs, human resource constraints and an increasingly competitive environment will also be the rule rather than the exception in the years ahead.” The survey also revealed that more than 40% of firms posted higher margins in China than what they achieved globally and nearly two-thirds said revenue growth in China was bigger than their global revenue growth. China was ranked the top investment destination for more than one-fifth of companies, the Shanghai Daily reports.