With leading economies of the world in dire shape, multinational companies (MNCs) are counting on China to deliver more of their global revenues and they believe that Beijing’s policies to raise incomes and hence consumption will create huge markets for them.

At the same time, however, they are facing an increasingly difficult operating environment with competition increasing, their traditional advantages eroding and policies on technology transfer causing confusion and concern.

Among the key findings of "Multinational Companies and China: What Future?" report released by Economist Intelligence Unit, is that multinationals, and large companies in particular, are clearly counting on China to deliver more revenue.

Almost half (49%) of all the survey respondents said that the fallout from the global financial crisis has raised their companies’ expectations for China. Among larger companies (global revenues of more than US$5 billion), the figure is 73%.

But not all companies are planning to invest more in order to increase returns. Among the larger companies counting on China to deliver more, half are counting on existing operations to deliver more growth.

Today, China is still a relatively small market for many multinationals, but this is expected to change quickly. Analysis of financial results for 70 MNCs showed that in 2010 only for ten did China account for more than 20% of their global revenues.

For more than half, China accounted for less than 10% of global revenues. Companies do expect this to change. Only 8% of our survey respondents said China is already their biggest market, but another 17% expect it to become so in less than five years, while another 21% expect this to happen in 5-10 years.

Among survey respondents, 58% said the Chinese government’s drive to raise incomes and shift growth towards domestic consumption will have the biggest impact on their China strategy, while 56% said that growth prospects for their industry was the key driver of their China strategy.