GM, other U.S. companies steel for short-term pain to win over long haul
U.S. companies in China see near-term risks from rising costs, slowing growth and stronger local rivals, though most are still upping investment and remain hopeful over longer-term prospects in the world's second-largest economy.
An annual survey released by the American Chamber of Commerce in Shanghai on Thursday found that more than 80 percent of the 406 companies that responded said they planned to increase investment this year, albeit at a slower pace than before.
Global business leaders, central bankers and investors have their eyes glued on China for signs of where its economy is headed after posting its weakest annual growth -- 6.9 percent -- in a quarter of a century.
"The moderation of the economy is part of the landscape. We continue to believe very strongly that over the mid to long term China still represents tremendous growth potential," said Matt Tsien, chief of General Motors' China operations, at a separate event on Thursday to open a Cadillac plant in Shanghai.
GM, the biggest automaker in China by sales last year, is sticking to its plans to add more capacity and has not made any special adjustments to its work force, Tsien added.
"We believe that by localizing and bringing products that are right for this market at the right price point, we're going to be able to gain market share over the years," he said.
Another survey by a separate, Beijing-based U.S. chamber on Wednesday said it expected China's economy will grow 6.25 percent or less this year.
The Shanghai chamber's report showed 2015 revenue growth for its members hit its lowest level since the financial crisis in 2009, with 61 percent of companies saying revenue grew last year, down from 75 percent in 2014.
"Most manufacturing sectors are experiencing margin squeeze, that is just the truth," said Cecilia Ho, the chamber's vice president who is also the Asia President of U.S. paper company International Paper Co, adding that these sectors were also facing serious overcapacity.
More than 70 percent also said volatility of China's currency, the yuan, was a risk over the short term.
Global business leaders, central bankers and investors have their eyes glued on China for signs of where its economy is headed after posting its weakest annual growth -- 6.9 percent -- in a quarter of a century.
"The moderation of the economy is part of the landscape. We continue to believe very strongly that over the mid to long term China still represents tremendous growth potential," said Matt Tsien, chief of General Motors' China operations, at a separate event on Thursday to open a Cadillac plant in Shanghai.
GM, the biggest automaker in China by sales last year, is sticking to its plans to add more capacity and has not made any special adjustments to its work force, Tsien added.
"We believe that by localizing and bringing products that are right for this market at the right price point, we're going to be able to gain market share over the years," he said.
Another survey by a separate, Beijing-based U.S. chamber on Wednesday said it expected China's economy will grow 6.25 percent or less this year.
The Shanghai chamber's report showed 2015 revenue growth for its members hit its lowest level since the financial crisis in 2009, with 61 percent of companies saying revenue grew last year, down from 75 percent in 2014.
"Most manufacturing sectors are experiencing margin squeeze, that is just the truth," said Cecilia Ho, the chamber's vice president who is also the Asia President of U.S. paper company International Paper Co, adding that these sectors were also facing serious overcapacity.
More than 70 percent also said volatility of China's currency, the yuan, was a risk over the short term.
