As compliance and regulatory law continue to make headlines, organizations all over the world are working towards creating environments that are more compliant and adhere to the latest standards and regulations.
In the past year alone, U.S. companies in China have been switching their focus to compliance after several high profile instances of corruption and high pricing surfaced, according to the American Chamber of Commerce in Shanghai’s annual report. Rising costs and a skills shortage remain their main concerns in an ever-changing regulatory landscape where companies have to work harder than ever to stay on top of the latest compliance regulations.
U.S. firms turned their attention from international corruption laws to China’s own domestic legislation, with 46.8 percent of firms saying it was the most important area of legal compliance, up from 31.5 percent the year before.
According to the report, the top five challenges cited by U.S. firms were still high costs, a skills gap, competition from local rivals, an immature market and corruption. Eighty-nine percent of firms cited rising costs as a hindrance to their business in China last year. Human resources was the second most cited problem, with rising wages, an ageing population, and greater social mobility making it more difficult to recruit and retain staff.
Due to the Chinese market growing slower than anticipated, fewer firms reported a growth in annual sales with 67 percent seeing an increase in revenue last year compared to 71 percent in 2012. This was the fourth year in a row the figure had fallen back. However, profitability remained a bright spot, with 74 percent of firms in profit for the year, edging up slightly from a year before, according to the report.
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