Page 6 - 2017 Special Report

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markets??? In 2016, although 29.9% of respondents reported 2-3 years for construction before producing goods. Given that 2016骞磋浆绉诲?????板?浠???虹?涓昏????锛??娆℃?涓??甯? 浜＄?琛ョ?锛??涓烘?涔????璁镐?骞存?浠????????虹?娴??
no shift, 13.3% of wholly foreign-owned enterprises, 11.4% of the above-mentioned postponed or reduced reinvestments ?哄????涓?‘瀹??с??腑?戒?澶???朵?甯???稿????澶т互?? ?电?????????璋??缁??????腑?借????澧????功???缁?
joint ventures, and 26.67% of representative offices of foreign would have produced goods for exports in 2016 - and keeping 涓?????绔??婵?????村??虹?澧????钩绛??? 璁哄?寤鸿??藉????淇?娇涓??涓?ぎ棰??灞???藉???舰?跨?绱?
enterprises, representing a substantial number of respondents, in mind that more than half of China?? exports are produced 杩??э?骞跺??朵负涓??缁???插?璀????????涓??蹇?』娓??
replied that they had shifted some reinvestments to other by foreign invested enterprises, it can be deduced that those 姝ゅ?锛?????骞寸????????????2017骞村????棰?? ?版?璇??锛??璧????涓????俊蹇??瀹?????璧???藉????
Asian, ex-China destinations. Among the Chinese company investments were shifted to other parts of Asia from China and ???涓??4.12%锛?????????????涓??甯?????涓?骞寸? 涓????负浜??????㈠け?э?涓??蹇?』杩??????????瑙ｅ?
respondents a significant percentage (17.6%) said that they had are now producing exports for those countries. 淇″????涓???? 涓??浼???????咖???绉??棰?????ㄤ?琛峰?浼??涓?????
moved some reinvestments overseas to other Asian destinations. 娴??婊??????
Approximately 30% of respondents cited rising operational costs Another major concern is land. Many foreign invested enterprise ??滑???锛?50%?ㄥ?杩????法?戒?涓??2016骞村?娑??
in China as a major driving factor for diverting reinvestment manufacturing facilities in China were built some 15 years or so 瓒??2.5浜跨???????璧??浣???跺????浣??2.5浜跨???? 姝よ?
to other destinations. Other major factors named were the ago. The land that these enterprises occupy in many cases is ???璧?」??????峰?煎??虫敞???锛???诲勾?告?锛?2017骞村?
perceived uncertainty of market prospects in China, more now considered prime for redevelopment into commercial and ??????棰????2.5浜跨????浠ヤ???法?戒?涓??灏??50%锛? ??ぜ锛?
attractive opportunities in competing destinations outside of residential real estate. While the central Chinese government 涓?????锛??浜?2.5浜跨????绠?????璧??娑ㄤ?涓??????绉?
China and the fierce local competition in China suggesting an has instituted a national law (????ф?????) encouraging the 瓒??琛ㄦ?????板?浼??楂??瀵瑰??版??ョ?甯?????淇″?棰? ????㈣?浜????＋
uneven playing field. conversion of old factory land into commercial and residential 婊★?骞剁?灏芥??斤???画???????????タ?板????涓??绠? ???缇????? 浼??
real estate, it has not provided any incentive, any regulation or ??欢???棰??璧????杩版??典护浜烘?蹇э???滑棰??锛?2016骞? 缇?腑缁????锤???绛??涓诲腑
In addition, the Study showed a 4.12% year-on-year decline in direction on how to support those factories which have been 楂?????璧?」????????2017骞村????棰????????浠や腑缇?????浜?お?板????浼?
reinvestment budgets for 2017, implying an erosion of investor operating on these lands in order for them to resettle or move ??2018骞村?2019骞寸??哄???蛋浣???
confidence in China for the upcoming year. economically and continue operating within China. Therefore,
many of these factories are moving out of China to other ???璧??涓??瓒?????2014骞村?濮??锛???惰?瀛??澶?
We have noticed that in 2016 50% of multinationals with existing nearby countries. 璧??涓???跺??扳???瀵光??????????????滑2015骞寸?
operations in China cancelled their reinvestments of over ???????????绀猴?2014骞村?????ョ?璺ㄥ?浼????25%
US$250 million or more, while at the same time they doubled Every now and then, we are contacted by a foreign-invested ???寤惰????娑??杩?2.5浜跨???互涓?????璧??????2015
their reinvestments in the lower categories of less than US$250 enterprise telling us that they have been served notices to 骞寸???????????????缇?????浼??浼????????棰??
million. Also for 2017 50% fewer multinationals have budgeted move, either by a local developer or the local government and 涓??浜?9.3%锛??绯?????锛??2015骞磋捣锛??璁夸?涓??骞?
reinvestments in the US$250 million or more category than last frequently, on very short notice. This is a major ongoing problem ???棰?????璧??涓??浜?16.9%??
year. However, they have at the same time doubled their 2017 which China needs to address immediately or it will face losing
budgets in the reinvestment categories of less than US$250 substantial export revenue for the long term future. 浠?2016骞寸??哄??板??ョ?锛???堕?涓??澶??浜?床?哄?
million. This trend suggests that executives on the ground in 棰??姣???胯?杩?7%锛??涓???哄?浠???茶蒋锛????负-7%宸?
South China have a high level of confidence in the future of It is not too late. Perhaps the results of this year?? Special Report ?炽???????╁缓宸ュ?寰?寰???瑕??杩?袱?颁?骞存??寸?寤鸿?涔?
the South China market and are investing amounts within their on the State of Business in South China, as well as, the conclusions ????芥?寮??浜с????????????????ユ?寤惰????灏??
decision-making ability. Executives at corporate headquarters and recommendations in our White Paper on the Business 杩????????搴????2016骞村缓???浜с????舵?浠??浜?В锛?
in the West, however, appear to be deferring large investments Environment in China, could actually help to urgently propel the 涓?????????哄???????澶??浼????骇?????姝ゅ???
which require their sign-off. We predict that the cancellation of central Chinese leadership towards that badly needed wake-up ???涓?堪寤惰????灏?????璧?凡缁??涓??杞?Щ?板?浠??娲?
larger reinvestments in 2016 and reduced reinvestment budgets call. It?? time to realize that there is steady erosion in investor ?藉?锛??????ㄧ??剁?浜у??ｅ?????
for 2017 will translate into reductions in China?? exports in 2018 confidence and actual reinvestment in China. In order to stop
and 2019. these hemorrhaging, issues which concern both Chinese and ??????涓?涓?富瑕??棰???腑?藉?澶??璧??涓?????璁炬?
foreign businesses need to be swiftly and decisively addressed. 澶х害??????骞村?寤洪??????浠??杩??宸ヤ??ㄥ?寰?寰?琚??
The downward trend in reinvestment follows from 2014, when To ignore these issues could lead to China?? economic stagnation. 涓烘???????瀹???颁骇寮????榛???版?????朵腑澶??搴?凡
there was perceived ??argeting?? of foreign-invested enterprises ?哄??藉?娉??锛?????ф??????锛???辨????????ㄥ?锛?
in China. Our 2015 Special Report subsequently revealed that in With best regards, 浣夸?????板?涓??浣??????颁骇寮???腑锛?????浜??浣?府
2014 25% of multinationals with existing operations in China ?╃???伐???杩????浣??灏??绉绘???苟???宸ュ??ㄥ?缁х画
postponed or cancelled their reinvestments of over US$250 Dr. Harley Seyedin 杩??锛??搴?苟???渚?换浣?????绛????瀹????????姝わ?
million or more. The 2015 Study showed a 9.3% reduction in President 寰??宸ュ?姝ｅ?绂诲?涓??锛??寰??朵??ㄨ竟?藉???
planned reinvestments by AmCham member companies; more The American Chamber of Commerce in South China
devastatingly, the same Study revealed a 16.9% reduction in Vice Chairman, U.S.- China Trade and Investment Policy ??滑涓??浼???板?璧??涓???ヤ俊锛??浠???ㄥ??瑰?
planned reinvestments for a three-year period from 2015. The Asia Pacific Council of American Chamber of Commerce ???????规?搴???????瑕??浠?滑?ㄧ??堕???????
杩???????甯镐弗??????锛?????ㄤ??舵????????垮?
Looking at export numbers for 2016, while total Asian exports 涓?┈涓?В?宠?涓??棰??涓?????灏????复澶ч?????ｆ?
(ex-China) grew above 7% year on year, China?? exports remained ?ユ?澶便??
sluggish at around -7%. Most reinvestments in factories require

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