More than half of UK businesses are optimistic about their prospects in the Chinese market in 2022, rising three percentage points year-on-year to 52 percent, reversing a three-year decline, according to a survey released by the British Chamber of Commerce in China on Tuesday.
Also on Tuesday, Chinese Vice Premier Hu Chunhua held a phone call with the British Chancellor of the Exchequer Rishi Sunak, during which they agreed to enhance bilateral trade and economic cooperation, according to the Xinhua News Agency.
Both sides agreed to hold the 11th China-UK Economic and Financial Dialogue at an appropriate time in 2022, Xinhua reported.
Improving sentiments among UK companies over the Chinese market highlighted continued economic recovery in the Chinese economy despite the lingering COVID-19 pandemic and other challenges.
The findings show, based on the results collected from 288 member companies of the chamber between October 12 and November 5, that 52 percent of the surveyed companies are optimistic about their prospects in China in 2022.
Also, 46 percent of companies are planning to increase investment in the country, according to the survey. Businesses in financial services, healthcare, retail and consumer goods are more confident.
Such confidence stems from improving earnings in the Chinese market over the past year. For as many as half of the companies surveyed, revenues have recovered to either equal or exceed pre-epidemic levels, with 70 percent of the firms expecting their revenues from China in 2021 to equal or exceed those of 2020.
Apart from China's sustained economic recovery, its improved businesses environment also encouraged foreign businesses operating in the Chinese market, though some still voiced concern over challenges.
Some 64 percent of UK businesses in China said that doing business was more difficult than in prior years, but the figure was down three percentage points from 2020's survey results.
For companies that reported an improvement in the ease of doing business, half attributed this to economic factors, while another 21 percent linked the improvement directly to China's successful response to the COVID-19 pandemic.
Lingering challenges such as the prolonged reduction of international flights and higher labor costs are also among the leading concerns, the survey suggested.
Restricted travel into China is now the single most significant issue that UK companies face, as "the decline in foreign nationals coming to live, study and work in China" becomes a cause for concern, according to the chamber.
Other issues such as rising labor costs were also raised by UK businesses, which come against the background of China's industrial transformation from labor-intensive industry to a high-tech oriented economy.
Though foreign media outlets have been hyping up the liquidity crunch at Chinese real estate developer Evergrande as a major risk to the Chinese economy, most companies hold a more optimistic view.
The survey shows that 54 percent of the companies remained optimistic about the country's economic prospects and vast business opportunities in the coming years.
