SINGAPORE — Greater competition, rising business costs, inconsistent regulations — these are some of the main challenges that Singapore companies face in China, even as many of them remain committed to the market and plan to invest more there.

These are among the findings of the inaugural China Business Climate Survey released last week by International Enterprise (IE) Singapore. The survey polled 402 business respondents from a range of industries, including technology, lifestyle, logistics and environment services.

Seventy-four per cent of the respondents cited “competitors” as a challenge they face in China. “Rising costs” were cited by 70 per cent, while 56 per cent were concerned about inconsistency or ambiguity in regulations.

“The Chinese environment is relatively complex, with multiple layers of government and many more regulations compared to Singapore,” said IE Singapore’s China Group Director Law Chung Ming. “Our overseas centres, with their in-depth connection and market knowledge, will be able to assist Singapore companies on this front.”

Mr Law also urged Singapore firms to compete by leveraging on their “Singapore” brand. “The brand enjoys a very high equity in China, where we’re associated with quality, safety, trustworthiness and reliability.”

Against this backdrop, the survey reaffirms companies’ confidence in China’s potential. Some 57 per cent of respondents view China as their No 1 or key priority market for the future. Moreover, over 40 per cent plan to increase investment and workforce in China in the next two to three years.

Singapore companies are also positioning themselves to tap the rising domestic consumption as China’s middle class continues to grow. As a result, Singapore companies in the business services, food and retail sectors have been more actively going into China in the past three years, compared to other sectors.

“Examples will include BreadTalk and Charles & Keith, which has gone into Central China with an outlet in Wuhan. A recent entrant will be Noel Gifts, which is setting up their first Chinese venture in Chengdu,” said Mr Law.

On the back of sustained business interest, foreign direct investments (FDI) from Singapore into China rose 3.44 per cent last year to hit US$6.31 billion (S$7.8 billion), China Embassy data shows. Cumulative FDI has reached US$59.26 billion, while the cumulative number of projects stood at over 20,000.

With this survey, IE Singapore plans to fine-tune its support for Singapore companies operating in or interested in China.

“This survey allows us to have a big picture. Once we have that, we’ll narrow it down to sectors that we’re more interested in, and step up our sectoral support,” Mr Law said.