{"id":4243,"date":"2024-06-14T12:17:22","date_gmt":"2024-06-14T05:17:22","guid":{"rendered":"https:\/\/thaipropertynews.com\/feeds\/?p=4243"},"modified":"2024-06-14T12:17:22","modified_gmt":"2024-06-14T05:17:22","slug":"survey-theres-cautious-optimism-among-china-based-ceos-in-the-face-of-growing-risks","status":"publish","type":"post","link":"https:\/\/thaipropertynews.com\/feeds\/?p=4243","title":{"rendered":"Survey: There’s Cautious Optimism Among China-based CEOs in the Face of Growing Risks"},"content":{"rendered":"

BEIJING<\/span>, June 14, 2024<\/span> \/PRNewswire\/ — Business confidence among China<\/span>-based CEOs of multinational corporations has improved marginally over the last six months. Despite the slight uptick in overall sentiment, business leaders in the country say that they face growing business risks, led by China’s<\/span> economic slowdown, concerns about rising geopolitical tensions and intensifying local competition. The Conference Board Measure of CEO Confidence\u2122 for China<\/span><\/a>\u00a0polls China<\/span>-based CEOs of mostly US and European multinational companies operating in China<\/span>. This semi-annual survey gauged sentiment on topics including current and future business conditions, the sales and investment outlook for China<\/span>, and the top risks facing business.<\/p>\n

Overall, business confidence (on a scale of 0 to 100) inched up from 54 six months ago to 56, indicating that sentiment remains cautiously optimistic. A reading above 50 reflects more positive than negative responses. The improvement was mainly driven by a reduction in outright negative sentiment, not by an increase in positive sentiment.<\/p>\n

Asked about the top risks impacting multinational businesses operating in China<\/span>, 61% of CEOs identify China’s<\/span> economic slowdown, followed by geopolitical tensions (55%), and downward pressures on prices due to local competitive intensity (48%). A significant share of CEOs say that they are holding off on any investments until economic, market, and policy conditions are more favorable (35%), while 58% expect investments and\/or operations to shift away from China<\/span> to India<\/span> in the next two years.<\/p>\n

“Market, economic, regulatory, and geopolitical factors are leading to a new competitive reality in China<\/span>, challenging old notions about the China<\/span> opportunity and how to capture it,” said Alfredo Montufar Helu<\/span>, Leader of The Conference Board China Center for Business and Economics. “Consumption is still weak, and local companies are fighting fiercely for market share. At the same time, geopolitical tensions are leading to a reassessment of China’s<\/span> status as a key link in global supply chains.”<\/p>\n

Additional highlights from the report include:<\/p>\n

BUSINESS CONDITIONS<\/p>\n

Little momentum on positive sentiment, but considerable decrease in CEOs holding negative views.<\/p>\n

35% of CEOs say current conditions are better than six months ago, up from 31% in H2 2023 but still significantly down from 88% in H1 2023. The percentage of CEOs saying current conditions are worse decreased from 39% in H2 2023 to 23% in H1 2024. 52% of CEOs expect conditions to moderately improve over the next six months, largely unchanged from 51% in H2 2023. Only 13% of CEOs expect business conditions to worsen in the near term, a notable improvement from 23% in H2 2023. <\/p>\n

SALES, INVESTMENT AND EMPLOYMENT<\/p>\n

Sales and investment outlook improves, but hiring intentions fall further into negative territory.<\/p>\n

A majority (55%) of CEOs expect their sales in China<\/span> to increase over the next six months, 10% expect them to moderately decrease, and 35% expect them to stay the same. This compares, respectively, with 46%, 17% and 37% in H2 2023. Fewer CEOs expect capital investments to increase over the next six months compared to H2 2023 (19% vs. 24%), but the proportion expecting investments to decrease has gone down from 40% to 23%. Almost a third of CEOs (32%) expect to reduce headcount over the next six months, compared with 37% in H2 2023. Only 6% expect headcount to increase. <\/p>\n

DERISKING GEOPOLITICAL RISKS <\/p>\n

With pessimism on China-EU and China-US relations, CEOs look to derisk. <\/p>\n

35% of CEOs think the relationship between China<\/span> and Europe<\/span> will worsen and 55% think the relationship between China<\/span> and the US will worsen over the next three years. China’s<\/span> relationship with Russia<\/span> (81% for relations with Europe<\/span>, 65% for relations with the US), industrial overcapacity (77% and 65% respectively), and de-risking from China<\/span> (68% for relations with both regions) are all seen as key friction points. 71% of CEOS are expanding their “in China<\/span> for China<\/span>‘ activities to de-risk their China<\/span> business, while 29% say their companies are establishing capabilities outside China<\/span> to ensure resilience. 58% expect investments and\/or operations to shift away from China<\/span> to India<\/span> in the next two years. A significant share also sees investments and operations shifting to Southeast Asia<\/span> (48%) and North America<\/span> (42%). <\/p>\n

About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead\u2122. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.ConferenceBoard.org<\/a>\u00a0<\/p>\n

\u00a0<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

BEIJING<\/span>, June 14, 2024<\/span> \/PRNewswire\/ — Business confidence among China<\/span>-based CEOs of multinational corporations has improved marginally over the last six months. Despite the slight uptick in overall sentiment, business leaders in the country say that they face growing business risks, led by China’s<\/span> economic slowdown, concerns about rising geopolitical tensions and intensifying local competition. The Conference Board Measure of CEO Confidence\u2122 for China<\/span><\/a>\u00a0polls China<\/span>-based CEOs of mostly US and European multinational companies operating in China<\/span>. This semi-annual survey gauged sentiment on topics including current and future business conditions, the sales and investment outlook for China<\/span>, and the top risks facing business.<\/p>\n

Overall, business confidence (on a scale of 0 to 100) inched up from 54 six months ago to 56, indicating that sentiment remains cautiously optimistic. A reading above 50 reflects more positive than negative responses. The improvement was mainly driven by a reduction in outright negative sentiment, not by an increase in positive sentiment.<\/p>\n

Asked about the top risks impacting multinational businesses operating in China<\/span>, 61% of CEOs identify China’s<\/span> economic slowdown, followed by geopolitical tensions (55%), and downward pressures on prices due to local competitive intensity (48%). A significant share of CEOs say that they are holding off on any investments until economic, market, and policy conditions are more favorable (35%), while 58% expect investments and\/or operations to shift away from China<\/span> to India<\/span> in the next two years.<\/p>\n

“Market, economic, regulatory, and geopolitical factors are leading to a new competitive reality in China<\/span>, challenging old notions about the China<\/span> opportunity and how to capture it,” said Alfredo Montufar Helu<\/span>, Leader of The Conference Board China Center for Business and Economics. “Consumption is still weak, and local companies are fighting fiercely for market share. At the same time, geopolitical tensions are leading to a reassessment of China’s<\/span> status as a key link in global supply chains.”<\/p>\n

Additional highlights from the report include:<\/p>\n

BUSINESS CONDITIONS<\/p>\n

Little momentum on positive sentiment, but considerable decrease in CEOs holding negative views.<\/p>\n

35% of CEOs say current conditions are better than six months ago, up from 31% in H2 2023 but still significantly down from 88% in H1 2023. The percentage of CEOs saying current conditions are worse decreased from 39% in H2 2023 to 23% in H1 2024. 52% of CEOs expect conditions to moderately improve over the next six months, largely unchanged from 51% in H2 2023. Only 13% of CEOs expect business conditions to worsen in the near term, a notable improvement from 23% in H2 2023. <\/p>\n

SALES, INVESTMENT AND EMPLOYMENT<\/p>\n

Sales and investment outlook improves, but hiring intentions fall further into negative territory.<\/p>\n

A majority (55%) of CEOs expect their sales in China<\/span> to increase over the next six months, 10% expect them to moderately decrease, and 35% expect them to stay the same. This compares, respectively, with 46%, 17% and 37% in H2 2023. Fewer CEOs expect capital investments to increase over the next six months compared to H2 2023 (19% vs. 24%), but the proportion expecting investments to decrease has gone down from 40% to 23%. Almost a third of CEOs (32%) expect to reduce headcount over the next six months, compared with 37% in H2 2023. Only 6% expect headcount to increase. <\/p>\n

DERISKING GEOPOLITICAL RISKS <\/p>\n

With pessimism on China-EU and China-US relations, CEOs look to derisk. <\/p>\n

35% of CEOs think the relationship between China<\/span> and Europe<\/span> will worsen and 55% think the relationship between China<\/span> and the US will worsen over the next three years. China’s<\/span> relationship with Russia<\/span> (81% for relations with Europe<\/span>, 65% for relations with the US), industrial overcapacity (77% and 65% respectively), and de-risking from China<\/span> (68% for relations with both regions) are all seen as key friction points. 71% of CEOS are expanding their “in China<\/span> for China<\/span>‘ activities to de-risk their China<\/span> business, while 29% say their companies are establishing capabilities outside China<\/span> to ensure resilience. 58% expect investments and\/or operations to shift away from China<\/span> to India<\/span> in the next two years. A significant share also sees investments and operations shifting to Southeast Asia<\/span> (48%) and North America<\/span> (42%). <\/p>\n

About The Conference Board
The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead\u2122. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.ConferenceBoard.org<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n

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