One in five Europe firms considers exiting China – survey

29 May 2012 17:49  [Source: ICIS news]

LONDON (ICIS)--More than one in five European firms with operations in China are considering moving elsewhere, according to a survey on Tuesday.

The EU Chamber of Commerce in China said in a survey it conducted 22% of 557 responding firms cited uncertainty and ambiguity in dealing with authorities, as well as lower labour costs in other Asia-Pacific countries as reasons why they may leave China.

Nearly half of the survey respondents said they had missed out on business opportunities in China because of regulatory barriers.

While many indicators suggest that the Chinese market is maturing “the same cannot be said of the regulatory environment” the chamber said.

“There is an overwhelming lack of optimism among survey respondents for future positive reform, with many companies perceiving regulatory reform to have stalled,” it added.

Last week, Peter Huntsman, the CEO of US-based chemicals major Huntsman, said that only a few years ago foreign manufacturers in China were greeted with open arms and project permitting was relatively quick.

However, as more Chinese producers are establishing local production, China’s permitting process takes much longer, Huntsman said at an investor conference.

Huntsman has had difficulties getting environmental permits for a methylene-diphenyl-diisocyanate (MDI) project it is planning in China, the CEO added.

The chamber conducted the survey in partnership with consultants Roland Berger. The results are available on the chamber’s website.

By: Stefan Baumgarten
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