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Regional Trade & Investment<br />
EUROPE<br />
Dutch Businesses in China Perform Well<br />
Dutch companies in China<br />
are doing well, and are optimistic<br />
about their future<br />
in the market, according to<br />
a recent survey by the Netherlands economic<br />
network.<br />
The survey, based on 174 Dutch<br />
companies established in China,<br />
showed that the majority of the companies<br />
are profitable. The respondents<br />
foresee an increase in turnover, profitability,<br />
and investment for 2012 and<br />
2013.<br />
Companies in certain sectors in<br />
the survey appeared as out-performers,<br />
especially those active in agro-food and<br />
trading. Large companies show somewhat<br />
better results than SME’s.<br />
However, in the past two years,<br />
20 percent of Dutch businesses suffered<br />
a loss. It turns out that predominantly<br />
smaller sized start-ups suffer losses.<br />
These companies seem to experience<br />
more barriers to doing business than<br />
others. The survey suggests that startups<br />
may take more time to become<br />
profitable compared to companies established<br />
in China for a longer period.<br />
“Evidently, being successful on the<br />
Chinese market takes a long-term approach<br />
and significant investment,” said<br />
the survey.<br />
China is becoming a strategic<br />
market for Dutch companies. The findings<br />
showed that local production and<br />
services for the local market are both<br />
increasingly difficult and strategically<br />
important. Almost all of the respondents<br />
serve the Chinese market, which<br />
is also the most mentioned strategic<br />
reason for establishing their business in<br />
China. Two thirds of the respondents<br />
report that their business in China contributes<br />
to the company’s overall profit.<br />
Dutch investment in China has<br />
been steadily growing in the past two<br />
decades. Figures from the Ministry<br />
of Commerce of China show that<br />
By Zhu Zijun<br />
the Netherlands moved up to the rank of eighth investor in China in<br />
2012 — the second from the EU, after Germany.<br />
The findings reflected an overall positive future outlook of Dutch<br />
companies in China. When asked about their expectations for 2012<br />
and 2013, 70 percent of the respondents answered to expect an increase<br />
in turnover; 60 percent expects higher profits. More than half of the<br />
respondents expect investments to go up and half plan to hire more<br />
employees in the foreseeable future.<br />
“There are opportunities for Dutch companies not yet active on<br />
the Chinese market and for those considering expanding their business,”<br />
said Aart Jacobi, Ambassador of the Netherlands to China.<br />
The Chinese business climate for Dutch companies is rewarding<br />
and challenging as well. The survey noted that access to the domestic<br />
market and stronger local competition is seen as one of the biggest<br />
obstacles or challenges to doing business in China. Many of the companies<br />
report difficulties in dealing with China’s regulatory framework.<br />
Managing government relations also proves to be a challenge. On the<br />
operational side many companies mention difficulties with regard to<br />
recruiting and retaining skilled, talented workers. Obstacles to business<br />
are both formal and informal.<br />
Moreover, there is an increasing attention for Corporate Social<br />
Responsibility (CSR) in China. The survey found that Dutch multinationals<br />
have integrated OECD and ISO 26000 guidelines into their<br />
Chinese activities. Considering the number of employees and sizeable<br />
supply chains of these companies, the Dutch focus on CSR is relevant<br />
in China. The results showed that there are ample opportunities to<br />
raise awareness of CSR among smaller Dutch companies.<br />
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