American Businesses in Shanghai Prosper in 2011, But Less Than in 2010

The American Chamber of Commerce in Shanghai, known as AmCham Shanghai, has released its annual report on US businesses in Shanghai. The companies did well in 2011, but not as well as in 2010. A few highlights:

• 78% of companies surveyed report they are “profitable” or “very profitable,” roughly matching results from 2010;
• 80% of companies surveyed report revenue growth in 2011 over 2010, down from 87% from last year’s survey;
• 51% of companies surveyed state their operating margins improved in 2011 from 2010, down from 66% in last year’s survey; and
• 62% of companies report importing parts or finished goods from the U.S. into China to support their China operations.

In 2011, US companies began facing some of the same problems in China that they have elsewhere: rising labor costs, lack of trained employees, and more competition. Government bureaucracy, lack of transparency, and increasing regulation are also cited as constraints on business.

Still, profits from sales of goods made in China to Chinese citizens are rising and companies are planning to increase investments in China during 2012.

An executive summary of the report is available here.