U.S. companies in China placed greater focus on compliance last year after several high-profile probes into corruption and high pricing, but rising costs and a skills shortage remained their main concerns, the American Chamber of Commerce in Shanghai said in its annual report.
The handover of power to a new generation of Chinese leaders last year raised uncertainty among U.S. companies over the political environment, but they were less worried than earlier about the risk of a slowing Chinese economy, according to the report released on Tuesday.
China, the world's second largest economy, posted 7.7% GDP growth in 2013, slow by Chinese standards but far quicker than stagnant growth in Europe and the United States.
Issues of corporate corruption caused ripples last year after a series of investigations against firms from British drugmaker GlaxoSmithKline to U.S. milk powder maker Mead Johnson Nutrition..
This pushed compliance up the agenda, with 44.2% of the roughly 400 firms polled saying there was a greater focus on this area last year, up from 36.6% who said the same in 2012. Over four in 10 said they would increase compliance spending over the next year.
U.S. firms turned attention from international corruption laws to China's own domestic legislation, with 46.8% of firms saying it was the most important area of legal compliance. That was up markedly from 31.5% the year before.
The top five challenges cited by U.S. firms were still high costs, a skills gaps, competition from local rivals, an immature market and corruption.
Rising costs was cited by 89% of firms as a hindrance to their business in China last year.
Human resources was the second most cited problem, with rising wages, an aging population, and greater social mobility making it more difficult to recruit and retain staff.
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