North European firms have are increasingly bullish about doing business in and with China, according to a new survey.

The SEB survey of 50 Nordic and German firms with a presence in China, found that 65% of senior management members expect the business situation to improve further while 18% think it will improve significantly.

The survey also found that funding requirements are increasing, with 62% of managers expecting to need access to more money in the next six months.

This is up by 16% from six months ago.

“Considering that companies continue to invest in China, this seems logical,” the report says.

“At the same time, the improved business situation with increased sales leads to a greater need for working capital.”
China’s Central Bank tightening of monetary policy has not dampened North European companies’ enthusiasm for the country.

However, major concerns for senior management in the country include high raw material costs, a lack of skilled staff
and the fierce competition of the Chinese market.

There have also been some worries on the international markets that China’s demand for raw materials is waning; in February China’s copper imports fell by a third from the previous month, though this has been largely attributed to the Lunar New Year when Chinese imports traditionally dip.

The Chinese government is also striving to keep the country’s import boom on track and is planning to build around 36 million low-cost homes and 10,000 miles of high speed rail over the next five years.

Fredrik Hähnel, general manager of SEB in Shanghai, says: “We see in our own business how client flows and demand for financing is increasing significantly right now. The need for working capital financing is up and companies also need financing for larger investments than previously.”

The SEB report seems to be as bullish about China’s prospects as the corporates that it surveyed.

“China is hot, red hot,” the bank says in its own conclusions on the survey.