Survey says China boosts profits, jobs for US companies

{mosads}According to this year’s USCBC survey, 80 percent of companies responding had double-digit growth in 2010, and more than 40 percent had revenue growth of 20 percent or greater.

The report accompanying the survey results does not attempt to estimate how many U.S. jobs have been created due to the growing profitability of doing business with and/or in China. It does, however, refute arguments made by Democrats in particular that U.S. companies are setting up operations in China to export more cheaply back to the U.S., which Democrats say is driving jobs away from the U.S.

“Despite rising costs, companies are committing more resources to their China operations,” the report said. “This increased commitment reflects the fact that 93 percent of respondents affirm that they are in China to reach the China market, not use the country to serve as a low-cost export platform.”

The report also notes that U.S. exports to China and Hong Kong have increased 468 percent since 2000, a rate that’s 10 times faster than the growth of U.S. exports to the rest of the world.

For several years now, Congress has prioritized China’s currency as the top economic issue between the two countries. Less than two weeks ago, the Senate approved legislation that could lead to increased duties on some imports as a way of compensating for what most agree is China’s undervalued currency.

However, the issue of currency was even less of a concern for USCBC members in the latest survey than it was last year.

“The exchange rate issue ranked 26th, five slots lowers than last year,” Frisbie said. “We should focus on the issues that matter and ensure we are coming up with effective solutions to the right problems.”

The USCBC and dozens of industry groups made a similar argument in September — that currency legislation would backfire and lead to Chinese retaliation against the U.S. at a time of heightened global economic uncertainty. These groups also argued that a currency bill would make it harder for the U.S. to focus on more critical issues that could help U.S. companies become even more profitable in China to the benefit of their U.S.-based operations.

The latest survey highlights a top 10 list of these other concerns. The top five are the same as the top five in last year’s survey: talent recruitment, delays in licensing approval, cost increases, increased competition with Chinese companies and intellectual property rights enforcement.

The USCBC said survey results show almost no progress on licensing, competition from within China and other issues, and said the gradual progress companies have seen on IPR enforcement has not been enough to move that issue further down the list. The group reiterated its longstanding call for continued work with China to resolve these issues.

“Engaging in focused, well-coordinated, and regular dialogue with the PRC government on both the broad principles and the specific issues is the best way to achieve solutions,” it said. “But when good-faith negotiations fail, using internationally accepted, rules-based legal remedies — such as antidumping investigations and World Trade Organization cases — is appropriate.”