GUANGZHOU: A new survey by the American Chamber of Commerce in Guangdong (Amcham Guangdong) shows the overall business climate in South China's Guangdong Province is rated positively by most US businesses in the area, but concerns remain over regulatory issues, competition and an employee shortage.

The Guangzhou Branch of Hewitt Associates Consulting (Shanghai) Co Ltd carried out the survey from January 9 to January 20. The group interviewed 161 people from a vast cross-section of foreign enterprises in Guangdong.

"I am delighted to report that the state of American business in Guangdong, and the Pearl River Delta (PRD) is excellent," Harley Seyedin, president of Amcham Guangdong, said yesterday.

Analysis of the latest survey shows a significant improvement in the business environment of Guangdong and the PRD, compared to results from the last survey taken in 2003.

More than 90 percent of the interviewees described the business climate in PRD as good, acceptable, very good, or outstanding, a rise of 15 percent from last year's results.

The survey says 16 percent of the companies have been in China for less than five years (between two and five years) and 8 percent have been here less than two years. Seventy-six percent of the companies are already profitable.

Nearly all companies reported that China's reforms at various levels over the past five years have had a positive impact on the climate for US business in China. Almost two-thirds assessed the impact of these reforms on their businesses to be great to very great.

Local business opportunities are the No 1 reason why companies have set up operations in the PRD, a sign that a strong local customer base exists for willing participants.

Geographic proximity to Hong Kong remains an important advantage of the PRD, as well as lower production costs, better infrastructure, and a more open attitude to business compared to other parts of China, the survey said.

Challenges remain

"There are lots of challenges to business growth in Guangdong and its PRD," Christian Doeringer, general manager of Hewitt's Guangzhou Branch, said when he was unveiling the survey results yesterday.

Regulatory issues from the Chinese government rates highly among the top five concerns of US companies.

Competition from both local and foreign companies is the second largest concern, followed closely by a lack of qualified employees, especially managers and specialists.

Participants of the survey anticipated it would be a long time before the challenges faced by businesses would be rectified.

"Besides the five concerns, I have more worries about the region's future development," Zhang Ying, general manager of the US-invested Delphi Packard Electric System Co Ltd, Guangzhou Branch, told China Daily.

The company is a member of Amcham Guangdong but did not participate in the survey.

"The cost of labourers in the PRD is increasing sharply, making the region lose one of its competitive advantages," Zhang said.

Amcham Guangdong's President Seyedin, promised they would perform a similar survey next year.

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