Overall, the Transportation and Logistics (T&L) industry is significantly more optimistic in its assessment of the business climate in China than foreign business in other sectors. 80 percent of respondents forecasted increases in the revenue of their company’s China operations for 2015 as compared to 2014. A similar majority characterizes their company's financial performance in China in 2015 as profitable. However, T&L industry respondents overwhelmingly report that their EBIT (earnings before interest and tax) margins for their China operations are lower than global margins, with none reporting better margins in China. Industry respondents view their company's unique branding as a significant competitive advantage over domestic Chinese competitors. Nevertheless, significant challenges remain. Inconsistent or unclear laws and regulars is reported as the top business challenge facing the T&L industry. Companies that plan to lower investment in 2016 as compared to 2015 cite the expectation of slower growth in China or existence of faster growing markets in other geographies as the sole reason.
Key Points of this Report:
- Rising salary and wage expenses is reported as the top human resources challenge for the T&L industry.
- All industry respondents cite less attractive local demand in China as the most important reason for moving capacity outside of China.
- Three-fourths of industry respondents report that EBIT margins for their company’s China operations are lower than their global margins.
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This report distills industry-specific data from the full 2016 BCS Report, reflecting the business climate for this specific industry.
To read more about how Logistics companies do business in China, visit the AmCham China Business Center.
