Yang Mei

yangmei_szdaily@163.com

SHENZHEN is the second most favored city on the Chinese mainland for investment, following Guangzhou and followed by Shanghai and Beijing, according to a report by the American Chamber of Commerce in South China (AmCham South China) released Monday.

According to the organization’s 2023 White Paper on the Business Environment in China and the 2023 Special Report on the State of Business in South China, 210 companies were surveyed for the report and data gathering was completed by Dec. 15, 2022. The companies come from all walks of life, with 38% engaged in primary and secondary sectors, 22% in consumption products and services, and 35% in professional services.

The report shows that over half of the surveyed companies consider South China’s growing market as the primary reason for investing in the area, 43% opt for its proximity to Hong Kong, Macao and Taiwan, and 40% choose the region’s better infrastructure. The companies admit that rising operation and labor costs, though having eased to some extent compared with 2021, were the two biggest challenges they faced in 2022.

The report indicates that China is still deemed as the most attractive destination for investment, with over 90% of the companies selecting China as one of the most important investment destinations. Dr. Harley Seyedin, president of AmCham South China, said the study shows that China’s economy will be a “crucial locomotive” in promoting global economic growth in 2023.

As per the report, most companies are upbeat about expanding their workforce in China in 2023, with 44% of them planning to increase their headcount. About 88% of the surveyed companies gained profits in China in 2022, up 6% compared to 2021.

There is a greater sense of optimism among the companies towards their expected time to reach profitability. A vast majority of them expect to attain profitability within two years.

It’s important to note that although up to 97% of the companies report their operations have been impacted by the COVID-19 pandemic, their appetite for exploring the Chinese market remains strong, with four-fifths of them actually reinvesting in China in 2022. In 2022, 74% of the surveyed companies chose not to shift their investments out of China. Around 75% of the firms plan to reinvest in China in 2023 and have set aside US$18.3 billion in cash for reinvestment over the next three to five years.

“China’s reopening will allow overseas building experts to return to China and help make investment projects now on hold a reality,” Seyedin said.