Most US Business in China Profitable
    2011-04-26 17:55:56     CRIENGLISH.com      Web Editor: Xu
The American Chamber of Commerce in China (AmCham-China) released the American Business in China White Paper on Tuesday in Beijing.
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Christian Murk, president of the American Chamber of Commerce in China (AmCham-China), attends the launch ceremony for the organization's 13th White Paper on American Business in China. [Photo: CRIENGLISH.com/ Xu Leiying]

The American Chamber of Commerce in China (AmCham-China) released the American Business in China White Paper on Tuesday in Beijing. According to the White Paper, 85 percent of respondents reported revenue growth in 2010, while 78 percent said that they were profitable or very profitable.

Christian Murk, president of AmCham-China, said about 41 percent members reported their margins in China are higher compared to worldwide margins.

He said, "This number- approximately 40 percent - saying that they are more profitable in China than they are elsewhere has been fairly consistent over a long period of time. It is not a new phenomenon. The major opportunity and advantage that this market offers is scale, size and growth. "

To seize the business opportunity provided by the Chinese market, companies need to take some long-term strategies. Murk noted that profitability is closely correlated with companies' length of time in China.

Murk said, "Profitability, having good profit margins, is closely correlated with the length of time a company has been in the market. So if you look at somebody who's been doing business here for two or three years, they are very likely not to be profitable at all. If you look at companies that have been here for five years or more, almost all of them have learned how to operate here and have been able to offer products and services that give them most revenue growth and good profit margins."

Matthew J. Estes, vice president of AmCham-China, added that profitability is closely correlated with companies' scales.

Small and medium sized enterprises from the United States are facing more difficulties in China, despite the fact that they are also drivers of economic growth in China and the US.

He said, "So it's the large multinationals being able to invest long periods; large multinationals with reach have the management team able to deal with the bureaucracy, licensing challenges and other issues - they do well. Vise versa, here is the question of SMEs, you see the opposite."

For instance, SMEs have to spend too much time to get licenses in different Chinese regions. In addition, SMEs in China usually face uneven regulation, and their access to commercial credit remains too low, according to the White Paper.

Matthew J. Estes urged local governments to help SMEs grow, because they can play an important part to address the imbalance in trade between the two countries.

AmCham-China is a non-profit organization representing the interests of some 2,600 companies and individuals doing business throughout China. This year marks the 20th anniversary of AmCham-China and also marks the 13th year of the White Paper.

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