Page 13 - 2023 Special Report on the State of Business in South China

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orting a positive overall ROI in China. 49% of the 繚撠賜?蝢??隡??撖嫣葉?賢??箏??輻?靽∪??箇?銝?摰??摨?
companies consider their overall ROI in China to be higher ??郭???雿????????韏??銝??蝏??憟賭葉?賢??箝??
than their global overall ROI.
繚銝??靘?????銝??韏???????????頞?????霈蹂?銝?
繚Although the confidence of American companies in 撠?葉?質?銝箸???????韏?????銋????偷蝞∪?銝??雿?蛹???
the business outlook in China oscillates to some extent, over 擐????憭??隡??瘥??餈?賒蝚??撟游??唬????雿????????韏?
50% of them still stay sanguine about the Chinese market. 隡??撠?葉?賢?銝箏????銝?之???????啜??

繚China is still deemed as the most attractive 繚隡????????蝏抒賒擃?隅嚗?2022撟渲?銵??????????
destination for investment. More than 90% of the 韏??隡??瘥??颲?80%??
participating companies select China as one of the
most important investment destinations. Although the 繚2022撟渲?摰?2.5鈭輻???誑銝???典?摰?????韏??靘?
proportion of foreign companies that regard China as the 擃???餃僑???隡??撖孵之憸??韏??靚冽???漲嚗??雿????嚗?2022
first choice for investment has declined for the second 撟湛?10%???霈蹂?銝??霈∪??典?餈??頞??2.5鈭輻???????嚗?
consecutive year, more than 50% still list China as the top 雿?2022撟湔?蝏??摰??餈?2.5鈭輻?????????????銝??靘??
three investment destinations. 銝?5%???韏??銝??瘨?晶鈭批?????∩?銝??摰?之憸??韏????
??銝箔?閫???????擃?????颲?7%??8%??
繚The investment enthusiasm of companies is on
an upward trajectory, with four-fifths of companies that 繚2022撟湛?74%???霈蹂?銝????銝??銝??隞亙????摰?
actually reinvested in China in 2022. 頧?宏???嚗?瓷??遙雿??銝???冽?蝳颱葉?賬??

繚Compared with the past year, more companies chose 繚憭折????銝??撠?葉?賢??箄?銝箏??????????霈∪?
to reinvest less than US$250 million in China in 2022. However, 銝??銝?憭折?閬?????????75%???霈蹂?銝?????2023撟渲?
companies are cautious about large investments. Specifically, 銵????????嚗??銝??68%???韏??銝??蝏抒賒瘛梯??葉?賢??箝??
while 10% of the companies had each budgeted to reinvest
US$250 million or more in China in 2022, only 5% actually 繚憸??2023撟游????銝??鈭?僑隡???典??拇隋???韏??
reinvested that amount in the same year. But American 蝞??撠?噢183鈭輻?????貉??餃僑?曇?銝??30.98%??
companies and companies engaged in consumption products
and services take an optimistic view of very large reinvestment 繚隡???曄?鈭??????⊥?撘??甇乩?嚗?69%???霈蹂?銝?
projects, accounting for the highest proportion and reaching ?冽??乩?撟湔??典??拙???????颲??撟游?瘥????3%??
7% and 8% respectively.
繚撟踹?餈?賒蝚??撟游?????乩葉鋡??霈蹂?銝??銝箸????
繚In 2022, 74% of the participating companies chose 餈????????嚗??甈⊥?瘛勗????瘚瑯???鈭???
not to shift their investments out of China. Not a single
company has intention to leave China entirely. 繚隞?僑靚???曄內嚗??銝??????啣??亙???????霈豢?
閫??蝏????銝箏?????箄????憓????憟賤?????末??????隡??瘥?
繚Most companies still consider China as a critical part 靘??瘥????9%嚗????銝箏?????箸?雿?????憓????銝????
in their future strategic development plans. 75% of the ???隡??瘥?????銝??11%??2022撟湛?餈?????銝????犖??
participating companies plan to reinvest in China in 2023, 韏?????憓?????隡???典?????箏?撅????葩???憭扳?????
including 68% of American companies that are determined
to dig deeper into the Chinese market. 繚擃?噢97%???霈蹂?銝?”蝷箇?鈭?????瘥???渡?蝑曇?
???銵???嗅蔣???隡??餈????
繚It is estimated that companies will reserve US$18.3
billion from profits for reinvestment in China in 2023 and the 13
next three to five years, a sharp fall of approximately 30.98%
compared with the previous year.

繚Companies are slowing down their business
expansion in China, with 3% fewer companies (69%)
planning to expand over the next three years.

繚Guangzhou has been recognized as the top preferred
investment destination in China six years in a row, followed
by Shenzhen, Shanghai, and Beijing.

繚Research this year reveals a trace of pessimism
over the business environment in South China. 9% fewer
companies rate the business environment as ??xcellent?? or
??ood?? while 11% more companies see a deterioration in
the business environment. Rising operation costs and rising
labor costs are identified as the two biggest challenges that
companies face in South China in 2022.

繚Up to 97% of the participating companies stated that
their operations have been impacted by visa and travel
restrictions induced by COVID-19.

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