The (Positive) State of Business in China – A Special Report

March 25, 2021
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During 2020’s fourth quarter, the American Chamber of Commerce in South China conducted its 17th annual study, surveying over 190 companies operating in China. The special report capped off 2020 with an optimistic outlook, explicitly claiming that “American business has obviously not given up on China” and that the in-market opportunities present, clearly “outweigh the challenges”.

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Main takeaways

Generally speaking, the business environment in South China is gradually perceived as more appealing. Nearly 80% of companies rank China’s business environment as either “good” or “excellent”.

90% of the surveyed American companies reported profitability in China in 2020.

China remains the US’s leading investment destination with over half of the surveyed companies ranking China as their number one priority for channeling investment (a 10% increase compared on 2019).

73% of the surveyed companies reported positive ROI (Return on Investment). It’s also worth mentioning that the ROI in China was higher than in other markets worldwide. Given these numbers, about 75% of companies showed intentions to reinvest in China in 2021.

In terms of decoupling from China – while 65% of companies still have expansion plans in China within the next three years, none of the companies surveyed showed a willingness to totally cease their China operations.

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84% of the surveyed companies expressed “optimistic” or “slightly optimistic” views towards China’s business outlook, a remarkable increase compared to the data accumulated in 2016-2019.

With the end of 2021’s first financial quarter around the corner, it is undeniable that China is pioneering the world’s economic recovery. And with reports such as this one cropping up, it can be presumed that China’s economic horizons look quite hopeful.

If last year you had reservations about planning for China, perhaps now is the time to reconsider them.

The full report is available for download on the American Chamber of Commerce in South China’s website. 


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