Foreign investors must adapt

Updated: 2016-01-25 07:39

(China Daily)

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Foreign investors must adapt

A clerk counts the cash in a bank in Huaibei, Anhui province, Oct 26, 2012. [Xie Zhengyi/Asianewsphoto]

The sense of anxiety among foreign companies in China is fairly understandable given the slowdown of the Chinese economy.

As headwinds from its slower growth have forced many domestic enterprises into an increasingly tight corner, it is natural that more and more multinational companies have also felt the pinch.

According to the Business Climate Survey recently released by the American Chamber of Commerce in China, 45 percent of respondents reported flat or declining revenues last year, with only 64 percent saying their China businesses were profitable-the lowest proportion in five years.

However, the current difficulties of some foreign companies do not mean that the investment climate in China is worsening.

Complaints about the business environment in China neither reflect the reality nor help these foreign companies adapt to the ongoing transformation of the Chinese economy from a global manufacturing powerhouse to a rising consuming society.

On the one hand, China remains the most attractive destination among developing countries for foreign investors. The latest figures from the Ministry of Commerce show that the amount of foreign direct investment that the country absorbed rose 6.4 percent year-on-year to $126 billion in 2015. Although the growth of foreign investment may be not as high as it used to be, it still represents a vote of confidence in the Chinese economy.

On the other hand, while some foreign companies may have been hit hard by the ongoing slowdown of the Chinese economy, especially in those industrial sectors plagued by overcapacity, there are also winners such as Starbucks which is eager to increase its stores in China from 2,000 at present to 3,400 by 2019.

As the Seattle company goes all out to tap into Chinese consumers' new-found enthusiasm for coffee, other foreign companies should do well to seize the opportunities of China's rise as a consuming society rather than complaining about the loss of old business opportunities.