Business Blog Posts

The annual survey by the American Chamber of Commerce in Shanghai, which bills itself as the "voice of American business" in China, comes as Chinese President Hu Jintao began a state visit to the United States.

China drew a record $105.7 billion in foreign direct investment last year, with inflows rising more than 17 percent from the previous year as global firms piled into the country to tap its vast and growing market.

An increasing number of U.S. companies in China expect higher revenue in 2011, but nearly two-thirds of the respondents in the survey said the regulatory environment had either remained stable or deteriorated over the past year.

Some 71 percent of respondents said that enforcement of intellectual property rights had stayed the same or deteriorated in 2010, up from 61 percent in 2009 and 64 percent in 2008.

"U.S. companies are concerned about the risk of rising protectionism and inadequate enforcement of intellectual property rights (IPR)," the survey said.

"IPR remains a top concern because U.S. companies perceive a lack of IPR protection and enforcement to be a blow to their competitive advantage and is costing U.S. companies billions of dollars in lost revenue each year."

China has arrested more than 4,000 people for violating intellectual property rights since November and will enforce tougher punishments to combat the "rampant" problem, a senior government official said last week.

U.S. and European corporations say recent crack downs have had little effect, with complaints about fake brand-name goods being overtaken by claims of Chinese firms assimilating more patent-heavy foreign technology.

High-speed trains, auto designs, mobile phones and wind turbines have all been the subject of vitriol about whether Chinese firms have stolen foreign companies' patents or whether the Chinese government has excluded foreigncompetitors by demanding that they hand over valuable patentsand designs.

The International Intellectual Property Alliance, which represents U.S. copyright industry groups, has estimated U.S. trade losses in China due to piracy at $3.5 billion in 2009.

HIGHER REVENUE

The Board of governors of the American Chamber of Commerce in Shanghai includes top company officials from the Chinese operations of Citibank, FedEx, Goodyear Tire & Rubber, APCO Worldwide, Corning and General Motors.

The American Chamber of Commerce survey was conducted from mid-November to early December 2010 and a total of 346 companies participated, with a 25 percent response rate.

The report said 71 percent of respondents expected their 2011 revenue to increase by at least 10 percent, up from 60 percent in a similar survey last year.