Inspection, testing firms find a niche

Foreign-invested inspection and testing companies have gained momentum in China in recent years as the country has continued to open up, the country’s top certification and accreditation regulator said on Tuesday.

Such companies deliver a wide range of inspection and testing services to ensure the safety and quality of products from motor vehicles, machinery and electronics to clothing, drinking water and precious stones.

The number of certified foreign-invested inspection and testing companies in China reached 301 as of the end of last year, most of them located in the more developed eastern regions, according to China’s Certification and Accreditation Administration.

The number of such companies in China increased at an average annual rate of 26 percent between 2015 and last year, compared with average annual growth of about 8 percent during the period for the sector overall in China, according to the administration.

Between 2015 and last year, the annual total revenue of foreign-invested inspection and testing companies in China increased by an average rate of 22 percent, compared with 15 percent for the national average for the whole sector, the administration said.

In addition, the size of the foreign-invested companies is much larger than their domestic rivals. Of the top 100 inspection and testing companies in China in terms of revenue, 21 are foreign invested, and their share of total revenues has been increasing steadily, the administration said.

The number of companies engaged in the inspection and testing business in China exceeded 36,300 as of the end of last year, an increase of 9.3 percent over the previous year, it said.

The booming development of the sector has played a significant role in improving the safety and quality of products and services in various industries in China, said Dong Lequn, deputy director of the administration.

As with many other sectors, China has continued to open up its markets to the inspection and testing sector, which has provided business opportunities for foreign companies, said Qiao Dong, chief of laboratory and testing supervision at the administration.

In 2015, the administration abolished a regulation that required any foreign investor who planned to establish an inspection and testing company on the Chinese mainland to have at least three years’ experience.

“The measure brought the interests of foreign companies into line with Chinese companies, which spurred rapid development of their inspection business in China,” Qiao said.

As of now, almost all major companies that are engaged in inspection and testing abroad have set up companies in China, including SGS in Switzerland, Bureau Veritas in France and TUV in Germany. Many have become leading companies in the sector in China, he said.

In addition to foreign-invested companies, China has also loosened restrictions on market access for private domestic companies in the industry.