Page 22 - 2018 White Paper on the Business Environment in China
P. 22
8 White Paper on the Business Environment in China
growing at almost 7 percent—several times the rate of investment environment. China’s government has told
U.S. expansion—a Chinese housing boom, and a slide in ministries to open up more sections of the economy
the U.S. dollar. Chinese President Xi Jinping’s ambitious to foreign investors amid increasing criticism from the
Silk Road, including billions of dollars of new roads, Trump administration about Beijing’s allegedly unfair
bridges, railways and power plants, is also paving the trade practices. The move also comes as foreign firms
way for American firms to sell heavy equipment and operating in China have expressed increasing frustration
other products. Caterpillar Inc. reported its sales in Asia- over limited access to markets and government policies
Pacific rose 25 percent in the second quarter. Shipments that they say discriminate against overseas companies.
of large excavators to Chinese customers more than China’s State Council published a long “to-do list” for
doubled in the first half of the year. “China’s grown ministries in August 2017 to encourage more foreign
pretty well relative to the U.S. over this period and the investment. The central bank and foreign exchange
currency’s relationship has changed in favor of the U.S. regulator were told to ensure that “foreign investors
companies,” said Jim Paulsen, chief investment strategist can freely remit their profits, dividends and other
at the Leuthold Group in Minneapolis (Jourdan). forms of investment returns in China overseas”. China
remains a major recipient of foreign direct investment,
And despite some negatives in the Sino-U.S. but anecdotal evidence suggests that it is losing its
relationship, a July 2017 report by the American Chamber attractiveness to investors, amid rising costs and limited
of Commerce in Shanghai showed that 82 percent of access to markets. China attracted $72.6 billion in
U.S. companies in China expect revenues to increase foreign direct investment from January to July 2017,
this year, up from 76 percent a year ago. The report down 1.2 percent on the same period in 2016. Chinese
claimed, “In general China is still a growth market for Premier Li Keqiang has frequently promised to open
lots of US goods and services... the Chinese consumer is China’s markets wider to foreign investment. President
driving more and more the growth in China itself - that’s Xi Jinping also told at an economic policy meeting
a very positive shift in compositional growth for a lot of in July 2017 that China should create a “stable, fair,
U.S. companies that do provide goods and services for transparent and predictable” environment for overseas
consumers, as opposed to building skyscrapers,” said Joe businesses. The State Council notice said ministries and
Quinlan, head of thematic investing at Bank of America, related government agencies must draft clear timetables
U.S. Trust. In the chip industry, Skywork Solutions, which on opening up sectors of the economy, including
according to Goldman Sachs gets about 85 percent new energy vehicle manufacture, ship design, aircraft
of its sales from China, reported its fiscal third-quarter repairs, maritime transport, railway passenger transport,
revenue rose 20 percent, thanks in part to demand from petrol stations and call centers, as well as banking,
Chinese phone maker Huawei. And Qualcomm, which brokerages and insurance. The foreign ministry and the
gets around two thirds of its revenue from China, said public security ministry were told to make it easier for
last month that China remained a strong growth story foreigners to live and work in China. That could include
for the company. Many other foreign companies are also allowing American travelers and business people to use
doing well. Even the liquor industry is benefiting from a credit card from home. Beijing has talked about some
resurgence in Chinese consumer demand (Jourdan). of these measures before, but it is the first time the State
In June 2017, exports from the world’s second largest Council has put them together in one list and urged
economy posted a 11.3 percent increase from the ministries to deliver on the promises (Wu).
previous year and a 17.2 percent rise in imports over
the same period in dollar terms. That left China with a According to data from the New York-based research
trade balance of $42.77 billion for the month, higher group Rhodium, China’s investment in the US tripled
than a Reuters poll forecast of $42.44 billion. China had in 2016 to $46 billion compared with $14 billion of
a $25.4 billion trade surplus with the United States in US investment in China. It only makes political sense
June, up from $22.0 billion in May. According to Reuter’s that if China businesses want to continue to invest
calculation, the surplus with the U.S. was China’s highest in the US, Washington should ask Beijing to grant
since October 2015, when it was $25.5 billion (Tan). wider market access and fairer treatment to American
businesses in return, according to members of the
During the second half of 2017, the Central US investment community. U.S. President Donald
Government began to take some steps to make Trump may have wrangled some trade concessions
foreign investors more comfortable in a better Chinese from Beijing, but an investment deal between the two
22
growing at almost 7 percent—several times the rate of investment environment. China’s government has told
U.S. expansion—a Chinese housing boom, and a slide in ministries to open up more sections of the economy
the U.S. dollar. Chinese President Xi Jinping’s ambitious to foreign investors amid increasing criticism from the
Silk Road, including billions of dollars of new roads, Trump administration about Beijing’s allegedly unfair
bridges, railways and power plants, is also paving the trade practices. The move also comes as foreign firms
way for American firms to sell heavy equipment and operating in China have expressed increasing frustration
other products. Caterpillar Inc. reported its sales in Asia- over limited access to markets and government policies
Pacific rose 25 percent in the second quarter. Shipments that they say discriminate against overseas companies.
of large excavators to Chinese customers more than China’s State Council published a long “to-do list” for
doubled in the first half of the year. “China’s grown ministries in August 2017 to encourage more foreign
pretty well relative to the U.S. over this period and the investment. The central bank and foreign exchange
currency’s relationship has changed in favor of the U.S. regulator were told to ensure that “foreign investors
companies,” said Jim Paulsen, chief investment strategist can freely remit their profits, dividends and other
at the Leuthold Group in Minneapolis (Jourdan). forms of investment returns in China overseas”. China
remains a major recipient of foreign direct investment,
And despite some negatives in the Sino-U.S. but anecdotal evidence suggests that it is losing its
relationship, a July 2017 report by the American Chamber attractiveness to investors, amid rising costs and limited
of Commerce in Shanghai showed that 82 percent of access to markets. China attracted $72.6 billion in
U.S. companies in China expect revenues to increase foreign direct investment from January to July 2017,
this year, up from 76 percent a year ago. The report down 1.2 percent on the same period in 2016. Chinese
claimed, “In general China is still a growth market for Premier Li Keqiang has frequently promised to open
lots of US goods and services... the Chinese consumer is China’s markets wider to foreign investment. President
driving more and more the growth in China itself - that’s Xi Jinping also told at an economic policy meeting
a very positive shift in compositional growth for a lot of in July 2017 that China should create a “stable, fair,
U.S. companies that do provide goods and services for transparent and predictable” environment for overseas
consumers, as opposed to building skyscrapers,” said Joe businesses. The State Council notice said ministries and
Quinlan, head of thematic investing at Bank of America, related government agencies must draft clear timetables
U.S. Trust. In the chip industry, Skywork Solutions, which on opening up sectors of the economy, including
according to Goldman Sachs gets about 85 percent new energy vehicle manufacture, ship design, aircraft
of its sales from China, reported its fiscal third-quarter repairs, maritime transport, railway passenger transport,
revenue rose 20 percent, thanks in part to demand from petrol stations and call centers, as well as banking,
Chinese phone maker Huawei. And Qualcomm, which brokerages and insurance. The foreign ministry and the
gets around two thirds of its revenue from China, said public security ministry were told to make it easier for
last month that China remained a strong growth story foreigners to live and work in China. That could include
for the company. Many other foreign companies are also allowing American travelers and business people to use
doing well. Even the liquor industry is benefiting from a credit card from home. Beijing has talked about some
resurgence in Chinese consumer demand (Jourdan). of these measures before, but it is the first time the State
In June 2017, exports from the world’s second largest Council has put them together in one list and urged
economy posted a 11.3 percent increase from the ministries to deliver on the promises (Wu).
previous year and a 17.2 percent rise in imports over
the same period in dollar terms. That left China with a According to data from the New York-based research
trade balance of $42.77 billion for the month, higher group Rhodium, China’s investment in the US tripled
than a Reuters poll forecast of $42.44 billion. China had in 2016 to $46 billion compared with $14 billion of
a $25.4 billion trade surplus with the United States in US investment in China. It only makes political sense
June, up from $22.0 billion in May. According to Reuter’s that if China businesses want to continue to invest
calculation, the surplus with the U.S. was China’s highest in the US, Washington should ask Beijing to grant
since October 2015, when it was $25.5 billion (Tan). wider market access and fairer treatment to American
businesses in return, according to members of the
During the second half of 2017, the Central US investment community. U.S. President Donald
Government began to take some steps to make Trump may have wrangled some trade concessions
foreign investors more comfortable in a better Chinese from Beijing, but an investment deal between the two
22
