(Yicai Global) Dec. 8 -- The large scale of the Chinese market and its importance to the global economy mean that is still the preferred investment destination for almost half of British companies, despite the challenges posed by the Covid-19 pandemic, according to a new survey.

Some 49 percent of British firms regard China as their top investment market and 18 percent rank China as their second or third choice, according to a report released by the British Chamber of Commerce in China today.

Should China open up its markets further to foreign companies, this figure would increase to 52 percent, with 17 percent willing to hike their investment greatly, the Beijing-based organization said.

China’s market potential, degree of deregulation, opportunities for co-operation with local firms, level of consumer spending and technological innovations are some of the most important considerations when companies decide whether or not to invest in China, the report said.

China’s financial service industry is of particular interest, with 70 percent of British financial services firms saying they would be willing to increase their investment should the country’s capital markets open further, the report said. Although regulators have already made great strides to reduce some of the barriers to market access, such as lifting a number of overseas investment caps, this shows that British companies await and welcome further opening up measures.

Some 44 percent of those surveyed said they would likely increase their investment in China next year. Most of these firms are in the food, beverage and agricultural sectors.

Forty-four percent of those planning to invest more will increase their investment by up to 25 percent. Most large companies are looking at a 10 percent increase while 38 percent of small and medium-sized enterprises will consider hiking their spending by more than 25 percent.

Companies in the financial services and professional services industries have shown a high degree of optimism this year, Chairman St. John Moore told Yicai Global. This has to do with China’s promotion of industry liberalization to a certain degree, he added.

Forty-nine percent of companies are optimistic about next year, down from 54 percent last year. Of these, companies in the financial service industry were the most sanguine at 62 percent followed by the professional services sector at 59 percent.

China is one of the top three overseas investment markets for 67 percent of SMEs and 41 percent of large firms. It is the most favored market for 75 percent of IT and telecommunication companies. Eighty percent of educational organizations, 69 percent of healthcare businesses, 68 percent of retail and consumer goods companies and 68 percent of hotels and tourism firms place China in the top three, the survey said.

Editor: Kim Taylor