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6 White Paper on the Business Environment in China
President’s Message
Ifeel that this year I should reaffirm our goals with by the business community in the direction of China’s economy.
these White Papers, since our format deviates from the They also clearly demonstrate the need for accelerated reforms.
norm. We do not aspire to partisanship, and as such we do not The most promising action by the Chinese leadership is its
simply catalogue what we see as poorly-conceived, punitive move to introduce “Supply-Side Economic Reforms”, a subject
or wrong. Instead, we see our Chamber’s constituents as a which we have addressed in detail in this White Paper.
single piece of a much greater whole. In that context, we feel
obligated to examine choices made by China’s leaders in terms Judging from the results of the Chamber’s 2016 Special
of the net good and net harm. Sometimes, this mandate is Report on the State of Business in South China, it appears that,
at odds with what people have come to expect from White while still very concerned about equal treatment and limited
Papers and other such publications of entities operating in transparency, multinational business has greater confidence in
China, and it can lead to the perception that we are not the overall direction of the Chinese economy, in general, and
truthful. On the contrary, where we lean on rhetoric it is to in the reforms currently being implemented by President Xi
communicate the urgency and potency of what we believe are Jinping and Premier Li Keqiang, in particular.
opportunities to draw the entire nation forward into history,
and not solely serve our own interests. A rising tide lifts all For instance, when asked how they expect their company’s
boats, after all. operations to change within the next three years, the results,
which showed “Services provided in China” and “China market
We see our mission with this White Paper as describing the share” as ranked first and second, respectively, indicated that, as
current state of China’s economy as an interested, but objective, a whole, multinational companies expect more expansion, and
participant. I have been told by various stakeholders that this bigger margin in the Chinese domestic market. The results of
approach is uncommon, but welcome. the budgeted reinvestments in China in 2016 showed an 8.79%
increase in one-year reinvestment figures, suggesting confidence
And so our White Paper is not simply a list of grievances. in the business climate in 2016.
That is far easier to compile than what we attempt here, and we
are happy to leave others to it. We aspire to record history, and Regarding South China’s overall business environment,
to lay out arguments to sway leaders to a direction which we this year, almost half of participating companies reported that
fully believe to be beneficial for all participants in this country’s China’s economic reforms in 2015 to some extent positively
yet-growing economy. affected their operations in South China, while over 30 percent
of participating companies reported that reforms have positively
The publication of our Special Report on the State of influenced their operations to a great extent or a very great
Business in South China and, more recently, its incorporation extent. This year, the percentage of participants, who reported
into our White Paper on the Business Environment in China that China’s economic reforms didn’t bring any positive effect
has become an annual milestone for the American Chamber of to their operations at all, dropped to 8.9 percent, indicating
Commerce in South China. improved sentiment and perception towards reforms.
These two publications represent a distillation of our now Moving on to specific initiatives, one of the new questions
2,300 members’ experiences, plans and insights in one of the most added to this year’s Special Report Study was the influence of the
dynamic—and sometimes challenging—markets in the world. Bilateral Investment Treaty (BIT) between the United States and
China on investment budgets of participating companies. Thirty-
While the two studies show modest progress in the seven percent feel their investments will increase with BIT, with 8
implementation of needed reforms, cautious optimism is seen
6
President’s Message
Ifeel that this year I should reaffirm our goals with by the business community in the direction of China’s economy.
these White Papers, since our format deviates from the They also clearly demonstrate the need for accelerated reforms.
norm. We do not aspire to partisanship, and as such we do not The most promising action by the Chinese leadership is its
simply catalogue what we see as poorly-conceived, punitive move to introduce “Supply-Side Economic Reforms”, a subject
or wrong. Instead, we see our Chamber’s constituents as a which we have addressed in detail in this White Paper.
single piece of a much greater whole. In that context, we feel
obligated to examine choices made by China’s leaders in terms Judging from the results of the Chamber’s 2016 Special
of the net good and net harm. Sometimes, this mandate is Report on the State of Business in South China, it appears that,
at odds with what people have come to expect from White while still very concerned about equal treatment and limited
Papers and other such publications of entities operating in transparency, multinational business has greater confidence in
China, and it can lead to the perception that we are not the overall direction of the Chinese economy, in general, and
truthful. On the contrary, where we lean on rhetoric it is to in the reforms currently being implemented by President Xi
communicate the urgency and potency of what we believe are Jinping and Premier Li Keqiang, in particular.
opportunities to draw the entire nation forward into history,
and not solely serve our own interests. A rising tide lifts all For instance, when asked how they expect their company’s
boats, after all. operations to change within the next three years, the results,
which showed “Services provided in China” and “China market
We see our mission with this White Paper as describing the share” as ranked first and second, respectively, indicated that, as
current state of China’s economy as an interested, but objective, a whole, multinational companies expect more expansion, and
participant. I have been told by various stakeholders that this bigger margin in the Chinese domestic market. The results of
approach is uncommon, but welcome. the budgeted reinvestments in China in 2016 showed an 8.79%
increase in one-year reinvestment figures, suggesting confidence
And so our White Paper is not simply a list of grievances. in the business climate in 2016.
That is far easier to compile than what we attempt here, and we
are happy to leave others to it. We aspire to record history, and Regarding South China’s overall business environment,
to lay out arguments to sway leaders to a direction which we this year, almost half of participating companies reported that
fully believe to be beneficial for all participants in this country’s China’s economic reforms in 2015 to some extent positively
yet-growing economy. affected their operations in South China, while over 30 percent
of participating companies reported that reforms have positively
The publication of our Special Report on the State of influenced their operations to a great extent or a very great
Business in South China and, more recently, its incorporation extent. This year, the percentage of participants, who reported
into our White Paper on the Business Environment in China that China’s economic reforms didn’t bring any positive effect
has become an annual milestone for the American Chamber of to their operations at all, dropped to 8.9 percent, indicating
Commerce in South China. improved sentiment and perception towards reforms.
These two publications represent a distillation of our now Moving on to specific initiatives, one of the new questions
2,300 members’ experiences, plans and insights in one of the most added to this year’s Special Report Study was the influence of the
dynamic—and sometimes challenging—markets in the world. Bilateral Investment Treaty (BIT) between the United States and
China on investment budgets of participating companies. Thirty-
While the two studies show modest progress in the seven percent feel their investments will increase with BIT, with 8
implementation of needed reforms, cautious optimism is seen
6
