US MULTINATIONALS AND CHINA

COOLING CHINA WORRIES SOME MULTINATIONALS

Nick Zieminski

Reuters, January 26, 2012

Slowing growth in China is emerging as a concern in some of this quarter's earnings reports from U.S. multinationals that have long relied on strong growth in China and other emerging markets to drive their profits.

Though China's economic growth is still well above that in other economies, its efforts to cool that growth -- for example, by restricting credit -- are now translating into weaker sales at some U.S. companies that do business there.

The trend is not yet widespread and companies are quick to stress the many advantages of China's market, but the commentary this earnings season has taken a more cautious tone than in the past.
3M Co's Asia-Pacific sales rose 3 percent in the latest quarter, weaker than in recent results, reflecting softer demand in China.

"The Chinese government successfully slowed activity to stem inflation," 3M Chief George Buckley said on a conference call with analysts. "Our China team anticipate continued below trend growth in the first half of 2012."

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