Foreign biz confidence in local market still healthy

Companies from around the world are still taking a strong interest in investing in China this year, despite the country's economic slowdown caused by the COVID-19 pandemic.

Harley Seyedin, president of the American Chamber of Commerce in South China, said more than 70 percent of companies recently surveyed and studied have reinvestment plans in China for 2022, including 76 percent of US companies.

"The percentage of companies with budgeted reinvestment of more than $250 million in China increased from 5 percent in 2021 to 10 percent in 2022," Seyedin said at a news conference during which AmCham South China released its 2022 White Paper on the Business Environment in China and 2022 Special Report on the State of Business in South China in this Guangdong provincial capital on Tuesday.

This year, more than 230 companies from around the world were surveyed and studied, he said, adding that it is estimated companies will set aside $26.5 billion from profits for reinvestment in China in 2022.

"About 72 percent of the surveyed companies intend to expand in China over the next three years, 7 percent higher than last year," he said.

"China is enjoying the highest popularity of all time as one of the preferred investment destinations by an overwhelming majority of the studied companies, and about three-fifths of the companies considered their overall return on investment in China last year to be higher than their global ROI," he added.

Companies still have huge faith in the Chinese market, with 77 percent choosing to keep their investment in China in the previous year.

"And not a single company showed an intention to leave China completely," Seyedin said.

Last year also saw an increase in staff numbers by half of the participating companies.

"Strong confidence can be found in the employment expansion plan with 57 percent of companies reporting augmentations of their headcounts significantly or slightly in 2022. Companies' share of global annual revenue from China went through a modest but mostly positive fluctuation in comparison with the previous four years, and approximately half of the companies obtained over 30 percent of revenue from China," he said.

Meanwhile, 63 percent of the companies saw their revenue from China increase significantly or slightly in 2021, returning to pre-COVID levels, with around 82 percent of the companies having already achieved profitability in China in 2021.

"The year 2021 marks the fifth consecutive year that Guangzhou remains the top reinvestment destination in China. And Shenzhen, Shanghai and Beijing are also ranked the most favored reinvestment cities by the surveyed companies," Seyedin said, adding that the business environment in South China shows an upward spiral of improvement in recent years.

"Diplomatic relations between the US and China have endured through almost half a century. As COVID-19 enters its third year, both sides need to stand firmly together at this crucial juncture to address common difficulties facing humanity including climate change, the pandemic, hunger and poverty," he added.

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