Overall, AmCham China member companies in the Machinery, Equipment, Systems & Controls (MESC) industry are more pessimistic than foreign business in other sectors. A majority of member companies reported declines in revenue and EBIT margins. Looking forward, 67 percent of respondents report that they do not plan to increase investment in China operations for 2016, with competitive pressure and cost competitiveness from local counterparts noted as primary reasons why.
Despite these and other challenges, only 9 percent of industry respondents have moved capacity out of China in the past three years and two-thirds of industry respondents characterize their company’s financial performance in China in 2015 as profitable. In particular, foreign companies in the MESC industry view their unique branding and technology & intellectual property as significant competitive advantages over their domestic competitors.
Key points of this report:
- Only 21 percent of survey respondents plan to increase headcount in China in 2016.
- Rising labor costs remain the top business challenge.
- 61 percent of respondents plan to establish an R&D center to increase innovation in China.
This report distills industry-specific data from the full 2016 BCS Report, reflecting the business climate for this specific industry.