After reviewing countless surveys conducted by foreign chambers of commerce in China this year, we’re thrilled to share that the level of confidence and trust of foreign companies in the Chinese market is growing consistently. The surveys show that the Chinese market’s fast recovery has alleviated many of the concerns raised after the COVID-19 outbreak in early 2020. At PTL Group, we are witness to a growing number of companies that find solutions to developing and managing their China operation – with local service providers.
The following post will present six surveys conducted by foreign chambers of commerce in China during 2021: the German, the American in Shanghai, the American in south China, the Swedish, the British, and the European Chamber of Commerce. The data exhibits foreign companies’ attitudes in light of their performances in 2020 and their positive outlook after 2021’s H1.
It is important to emphasize that the positive results presented here should not be taken for granted. COVID-19 crisis indeed impacted companies in a negative manner, and the regulatory reality in China is still far from perfect. Yet, the massive potential inherent in the Chinese market should not be ignored, and with the right attitude and professional support, you can definitely overcome a majority of the challenges.
Financial outcomes vs. expectations
Despite the gloomy predictions at the beginning of 2020 with the COVID-19 outbreak, foreign companies in China managed to reach profitability in 2020. Also, 38% of the European Chamber of Commerce’s surveyed companies and 77% of the German Chamber of Commerce’s surveyed companies mentioned that their revenue margins from China were stronger compared to other markets they operated in.
Read more about China market entry
Not giving up on China
The vast majority of foreign companies in China do not show any intentions to leave China. In the case of American companies in south China, none of the surveyed companies expressed a willingness to leave China completely.
Expanding operations in China
When asked about their future plans in China, foreign companies expressed their intention to expand within the country. They listed China’s fast economic recovery and the market growth in general as the main motives behind this intention.
A comparison with previous year’s surveys signifies the growing confidence felt by foreign companies in China:
- 8% growth among the companies surveyed by the European Chamber of Commerce that intend to further invest in China (51% at the end of 2019 and 58% at the end of 2020).
- Over 20% growth among the companies surveyed by the Swedish Chamber of Commerce that expressed their eagerness to invest further in China (33% at the end of 2019 and 57% at the end of 2020).
- 44% of American companies in south China rank China as their top investment destination priority, compared to 28% in the previous year.
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Optimism towards the future
Contrary to how 2020 started, at the beginning of the current year most foreign companies in China were more optimistic and anticipated continued growth in 2021. This is mostly evident in the European Chamber of Commerce in China’s survey, which points to a 20% increase in the positive attitudes towards growth in China.
To conclude, the Chinese market has demonstrated a fast recovery and was the first to emerge from the economic crisis triggered by the COVID-19 outbreak. Growth and consumption figures are still encouraging, as well as the governmental policy implemented to control the COVID-19 spread. 2021 will soon end, and the optimistic forecasts are becoming a reality and reflected by foreign companies’ growing interest to enter the Chinese market.
For more than two decades, we’ve been helping international companies to enter, establish, and scale up their operation in the Chinese market. Get in touch today, and we’ll be happy to help.
The data is taken from the following surveys by foreign chambers of commerce in China:
German Business in China: Business Confidence Survey 2020/21
American Business in China White Paper
2021 Special Report on the State of Business in South China
Business Climate Survey for Swedish Companies in China 2021
British Business in China: Sentiment Survey 2020-2021
European Business in China: Business Confidence Survey 2021