Most American companies operating on the mainland are focused on selling their goods and services to the domestic market rather than producing for export, according to a survey released yesterday by the American Chamber of Commerce in China. 'Companies overwhelmingly are here to serve the Chinese market,' said Teresa Woodland, a member of the chamber's board of governors and the organiser of the annual survey. The survey results highlight the enormous improvements in China's regulatory environment and greatly expanded market access for foreign companies that has allowed them to view the country as more than just a cheap manufacturing base. Increased market access has also meant a shift away from traditional joint-venture arrangements to wholly foreign-owned enterprises. Last year just 27 per cent of responding companies had a joint venture with a local partner compared with 78 per cent of companies in 1999 when the survey began. 'If you look at the six-year trend, we need to be declaring victory and celebrating accomplishments,' said Chris Murck, managing director in China for consultancy APCO. But the survey found that an increased focus on the domestic market brought with it increased competition in most industries. Last year, 70 per cent of United States companies with Chinese operations said they were seriously negatively affected by competition from their foreign and domestic counterparts, compared with just 7 per cent in 1999. The survey found that the biggest challenge to US companies was the shortage of skilled labour in China, particularly at the management level. 'While all the other top 10 challenges are getting better, this is one that [American Chamber of Commerce] members believe is getting worse,' Ms Woodland said. 'They're not just having trouble finding people but labour is becoming more expensive.' Almost 500 companies participated in the survey which is distributed to more than 500 central government officials, every member of the US congress and numerous US government officials.