US companies doing business in China face a combination of continued growth and numerous challenges and hurdles, according to a new survey.

The 2012 China Business Environment Survey was conducted by the US-China Business Council (USCBC), which represents about 240 US companies selling into the Chinese market.

“US companies continue to see strong growth and profitability in China,” said USCBC president John Frisbie.

“Two-thirds of companies surveyed said revenue from their businesses in China grew by 10% or more in the past year. Seventy-five percent said profit margins from their China operations were the same as or better than their company’s global margins.”

But, he added, challenges remained and, while 90% of respondents were optimistic about the prospects for the next five years, 45% were less optimistic than three years ago.

Talent recruitment and retention was the biggest challenge identified in the survey, followed by the ability to obtain business licences.

Cost increases ranked fourth in the survey, but were named as the biggest restraint on profitability.

Other challenges included competition with local businesses, uneven local law enforcement and inadequate protection of intellectual property rights.