Page 12 - 2019 Special Report on the State of Business in South China

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Key Takeaways ?抽?瑕??

Almost all respondents report that they are 澶ч????璁夸?涓?凡?ㄥ??峰????锛???ㄥ???
profitable in China, and their overall return on ?????????姣?????璧???ョ??撮?锛??
investment in China is higher than their global overall 姝ゅ?涓??甯??????夸?淇??涔??????害锛?????锛?
return on investment. Therefore, most remain optimistic ?藉?????村?杩?????扮??╃????浼??澶у??????
towards the business outlook in China. However, fewer
companies expect to become profitable in a short pe- ?界?2018骞翠腑?藉??哄??ㄨ?澶???㈡????浣??
riod of time than the last few years. 浠??璁夸?涓?????璧????〃???涓?苟娌℃?澶ч?绉????
绂讳腑?藉??猴?涓?????涓??浠??娴?????瓒ｏ?涓昏???
??负涓??甯??????挎?????剁?瀵归????璧???ョ???
Albeit there were many negative news stories ???锛?ぇ?ㄥ????璁夸?涓?〃绀轰?浠??涓?????浜烘???
about the Chinese market in 2018, the reinvestment 姣???????????浠?????锛??涓??澧???ㄥ???????
statistics of the companies in our study indicate that ?讹?浠??涓??ㄥ?浼??姝ｅ????璧?浆绉诲??朵??藉?锛??
they have not withdrawn from the Chinese market on 涓??????????负涓??杩????????娑ㄣ??
a large scale, and they still have a strong interest in
investing in China. This is mainly because of the growing ???浼?????瀵瑰?????鸿????澧?〃绀烘弧???瀵?
potential of the Chinese market and its relatively high 绮ゆ腐婢冲ぇ婀惧?????????Н???瑙????害锛???煎?娉?
return on investment. Meanwhile, more than a half ??????讳???骇???涓????汉???婧?????娑ㄥ????
of the respondents witness year-on-year growth of 浜烘????涔?凡?????负?剁害????板?杩??姝ュ?灞????
employment in their companies in 2018. We also find 瑕??绱???
that while increasing reinvestment in China, some of
the companies have shifted some reinvestment to other ???浼??瀵圭?涓??绯诲????灞?????涓ゆ??????
countries. The primary reason is the increased operating 瓒??锛?ぇ?ㄥ????浼??璁や负缇?腑涓ゅ???悍浜??2019
costs in China. 骞存?杩??姝ユ?澶х???????浜??涓?锤?????凡??画涓?
娈垫??达?棰??杩??璐告?浜??瀵逛?涓??褰卞?浠??缁х画锛?
Generally speaking, the business environment 杩??涓烘?涓ゅ?璐告??崇?缁??涓?甫?ョ?璐??褰卞?姣????
in South China is good, and the future development 褰卞?澶э?绾?????璁夸?涓??姝よ??涪澶卞??轰唤棰???ぇ??
of Guangdong-Hong Kong-Macao Greater Bay Area ???璁夸?涓???╃?缇?腑涓ゅ?90澶┾??????????翠?
is considered positive among the companies. What is 涓??灞???ワ?绉??搴??璐告?绾蜂?甯?????绋冲??????
worth noticing is that increasing production costs, rising
labor costs, and shortage of qualified personnel have
been constraints on South China?? further development.

Even though the opinion of participating com-
panies appear polarized concerning the prospect of
the US-China relationship, most of the respondents
believe that the dispute between the US and China
may be further expanded in 2019. As the US-China
trade friction has been going on for some time, the
companies participating in our study expect that the
impact of the dispute on enterprises will continue. So
far, the negative impact of combined tariffs on compa-
nies has exceeded the positive impact. Approximately
30 percent of the respondents have lost market share
due to the imposed tariffs. Most of the companies have
taken advantage of the 90-day truce between the US
and China to adjust their development strategies and
actively respond to the uncertainties brought by the
trade disputes.

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