CRI听力:EU Companies in China Facing more Pressure from Domestic Companies

The new survey shows that nearly all the European companies that responded consider China an increasingly important market in their overall global strategy.

In fact, around half of the 550 companies say they see their revenues generated in China accounting for at least 10 percent of their global sources of cash.

However, the survey shows 7 percent fewer EU companies are reporting an increase in their net profits so far this year compared with last year.

The report says one of the reasons is the rising labor cost when European companies doing business in China.

Davide Cucino is the President of the European Chamber of Commerce in China.
 
"One out of two companies start to consider to expand in other part of China in more and more provinces not only because of the Go West policy but also because the operating cost in those places is relatively cheap compared with the coastal area and government are able to grand more incentives."

Aside from hunting around China for cheaper labor, Cucino says European companies want to see the government do a better job in communicating regulatory changes to them.

"There is a lack of communication in the implementation of new rules, it means that whenever companies are also ready to comply with local certification requirement they got fewer information sometimes only in Chinese and then it means it takes time to comply with those requirements while domestic companies are immediately able to comply with the same requirements."

Another reason is perhaps the competitive pressure from Chinese companies when it comes to both pricing and branding. Cucino suggests that in the future, the European companies in China should focus on brand recognition, and on marketing and sales, in order to increase revenue and to be more profitable.

This year's confidence survey also suggests EU companies need to better target their products and services to the Chinese consumer to try to gain a competitive edge over their Chinese counterparts.

For CRI, I'm Shen Chengcheng.