Foreign Companies Thrive in China's Booming Economy

Strategic Insights -

In a recent survey by the American Chamber of Commerce in China, 68% of American companies in China reported profitable or very profitable performances in 2004, with 86% of companies experiencing higher revenues compared to the previous year. The survey, included in the chamber's White Paper 2005, revealed that 93% of respondents believe China's economic reforms have improved the business climate for US companies, and 92% expressed an optimistic or cautiously optimistic five-year business outlook.

Key Takeaways:

  • 68% of American companies in China reported profitable or very profitable performances in 2004.
  • 86% of companies experienced higher revenues compared to the previous year.
  • 93% of survey respondents believe China's economic reforms have improved the business climate for US companies.
  • 92% of respondents expressed an optimistic or cautiously optimistic five-year business outlook in China.
  • 62% of respondents are in China to serve the local market, while 11% are exporters.
  • China has become a significant profit source for foreign investors, with over 450 of the top 500 multi-national companies having started business in the country.
  • Statistics show that Nokia's net sales in China rose from 2.013 billion euros in 2003 to 2.66 billion euros in 2004.
  • Motorola has witnessed substantial growth since entering China in 1987, with its wireless paging products becoming the winner in both the Chinese and global markets.
  • In the first seven months of 2005, China's mobile phone subscribers rose by 3.319 million to total 368 million.
  • General Motors' profit from the China market grew to 25% in 2004, with the company expecting a further increase in 2005.
  • Statistics from the Ministry of Commerce show that over 5 million cars were sold in the Chinese market in 2004, making it the third largest auto market in the world.

Statistics:

  • 68% of American companies in China reported profitable or very profitable performances in 2004.
  • 86% of companies experienced higher revenues compared to the previous year.
  • 93% of survey respondents believe China's economic reforms have improved the business climate for US companies.
  • 92% of respondents expressed an optimistic or cautiously optimistic five-year business outlook in China.
  • Over 450 of the top 500 multi-national companies have started business in China.
  • Nokia's net sales in China rose from 2.013 billion euros in 2003 to 2.66 billion euros in 2004.
  • China's mobile phone subscribers rose by 3.319 million to total 368 million in the first seven months of 2005.
  • Over 5 million cars were sold in the Chinese market in 2004, making it the third largest auto market in the world.

Sources:

  • American Chamber of Commerce in China
  • White Paper 2005
  • Nokia's financial reports
  • Motorola's financial reports
  • General Motors' financial reports
  • Ministry of Commerce
  • Ministry of Information Industry