Doing business in China - Washington vs business (#89; Topic B)

A hot topic at last month's World Economic Forum at Davos was on doing business in India and China. The most popular topic a the US Business Summit at Boca Raton, currently in session, is on doing business in China. Last year, GM earned $238 million in China (#83); two days ago, Starbuck confidently forecast a 20% annual increase, counting mainly on China, "the market with the biggest potential" (Investor's Business Daily, 2/15/06) -- it currently has 220 shops in China. Today's Wall Street Journal, under the heading "U.S. Businesses Say They Prosper in China," summarizes an annual survey of its members by the American Chamber of Commerce in China, saying "Most are profitable." (A couple of days ago, in a CNBC interview, its president said that "90% are profitable.") WSJ then offered this insight: "the study highlights a widening gap between perceptions in Washington about trade with China ... and the experience of U.S. companies that have taken the plunge into China." Indeed, while the U.S. Trade representative "criticized China [for] keeping American products out of the country through unfair competition and barriers," an ACCC consultant responsible for producing the survey indicated that "profit margins of U.S. companies in China are running at 8% to 15%." (WSJ, 2/13/06) If anything, given that "foreigners often pay less than half of the typical 33% tax imposed on domestic firms" (WSJ 2/14/06), U.S. companies enjoy not a disadvantage, but a distinct advantage.
Posted at 11:17 am, Friday, February 17, 2006