Chinese Companies Identify Regulation and Compliance as Top Business Risk

Even though the acute stress of the financial crisis has passed, Chinese organisations are still facing a variety of recurring and new threats and challenges across all sectors as the global economy exists recession, finds the third annual Ernst & Young Global Business Risk report.


In the report, over 70 leading industry executives and analysts across 14 industrial sectors were asked to identify and rank the top business risk for each sector for the next 12 months as well as risks currently below the radar that could rise into the top 10 in the years head.


Regulation and compliance regained the top spot across the majority of sectors driven principally by the general uncertainty surrounding regulation which Ernst & Young believes is stalling business decision-making. However, access to credit and the threat of continuing weak economic performance in parts of the world remained high on the list of potential concerns.


Chinese companies are also threatened by the general shortage of qualified high-end talent needed to support global market. Emerging markets are also posing threats to Chinese organisations.


Increasingly stringent environmental regulations also pose a risk to Chinese companies as compliance could increase business costs.


Another challenge faced by Chinese organisations is the maintainance or rebuilding of the public trust through transparent business activities and careful public relations management.


"It is clear that Chinese companies are facing fierce competition in both domestic and global markets. To protect their positions in the market place and to enhance competitiveness, the ability to manage risk is crucial to success," notes Frank Mei, risk partner at Ernst & Young.



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