F REIGN TRADE - 中国国际贸易促进委员会

Changeof Foreign CapitalDistributionBy Economy Reference Newscompanies. In 2012 U.S.-China Commerce Chamber for the first timeraised the question “whether the labor costs will impact company operation”in the annual “Business Environment Investigation Report”. Theresult shows that 82% people think the labor costs will impact the companyoperation.But Zhou also mentioned that those companies who have highrequirements about high-stream and low-stream industry chain willchoose to stay. It is said that companies of this type would finally returnto China.Hu Ke, director of the trade development department of the ManagementCommittee of the Suzhou Industry Park, told reporters that thecompanies introduced into the industry park are mainly global top 500,whose core competency lies in their brand and technology. Once establishedin the industry park, these companies are stable and less sensitiveto costs. Hu added that his years of experiences in inviting commercialcapital show that those “migrant” companies mainly belong to companieswith low added values, weak competitiveness and high sensitivity to thechange of costs. The more comprehensive the company is; the more stableit will be. Many foreign-funded companies in the industry park not onlyfunction as production base, but also as corporate headquarter, R&Dcenter or design center.“They need this market”Zhang Xiangchen, director of the Policy Research Institute of theMinistry of Commerce, also discovered that it will be a natural processfor the low-end manufacturing business to maintain their investment levelin China or move to China’s middle and west regions or even overseas.For the medium-level manufacturing industry, the U.S. and Europeancompanies will expand their investments because they need the Chinesemarket.Zhang remarked that the U.S. government has adjusted its policiesby encouraging the development of local manufacturing industryand also the return of overseas capital.Boosted by such policy change, Ford,Carlyle and NCR Corporation havedecided to move its overseas capacitiesback to the U.S. He confessed that thiswill bring certain pressures to China,but the survey shows that the numberof U.S. companies moving back is smalland it is only restricted to those industriesor products highly dependent onthe U.S. market. Many big Americancompanies, including GE and Apple,will further expand their investmentand capacities in China. Therefore, “ingeneral, China’s market potential andindustry condition have huge attractionsto the overseas manufacturers.”But the “Business EnvironmentSurvey Report” issued by AmChamChina in 2012 also shows that althoughthe costs have been rising in 2011, morethan 75% people still predict the salesrevenue of foreign companies in Chinawill rise in 2012, 39% U.S. companiessay that the profit margin in China isstill highest in the world, and 78% U.S.companies listed China as one of thethree investment targets of the world.“Obviously the foreign-funded companiesdo not want to leave China.” thereport indicates.Shen Danyang also mentionedthat although the U.S. and some Europeancountries will call back the capitaland reduce their investments to Chinadue to the impact of the manufacturingindustry strategy, the Ministry of Commercesays there has been no large-scaleexit of foreign investors from the Chinesemarket.Shen added that “we are still optimisticabout the prospect of China’sinviting and using foreign investments,because the investment environmenthere has been improving.” He said thataccording to the “2011 QuestionnaireSurvey Report of Japanese ManufacturingCompanies’ Overseas Business”issued by JBIC, the Japanese manufacturersare speeding up their overseasexpansion, and China and India willbe their investment priority. Also, the“Medium-sized Company BusinessClimate Survey” issued by SingaporeUOB Group also shows that China willbe the primer choice for the business investmentof Singaporean medium-sizedcompanies.11