Deloitte Survey Shows Confidence In Chinese Economy Being Lost By Finance Executives

The results of a survey conducted by Deloitte released on Wednesday shows that the confidence of senior finance officers at companies operating in China is being pulled down by increasing trade risks.

The consultancy organization conducts the survey twice a year among financial executives about their attitudes on trade and business as a part of its survey of CFOs in China. According to 82 per cent of the respondents of the survey, their economic outlook on trade had turned out to be less optimistic, while responding to a question related to changes in their sentiments in the last six months. In the survey conducted six months ago, only about 30 per cent of respondents had noted a drop in their optimism on expectations from business and trade.

“There has been a sharp shift in sentiment,” William Chou, national managing partner of the Deloitte China CFO Program, said in a press release while announcing the results. He identified a number of factors that include the rising concerns about the possibilities of non-resolution of the trade war between the United States and China and the issues with the Chinese stock markets.

The faltering of the stock markets has been partly blamed on the ongoing trade war between the two largest economies of the world. Despite an agreement for a 90 day truce to the trade war between the US and China was agreed to between in a meeting between US president Donald trump and Chinese president Xi Jinping in Argentina on December 1, there are lingering concerns about the existing of the trade tariffs already imposed by the two parties and about the unclear picture of a resolution of the trade war emerging in the 90 day period when the two parties are expected to trade meetings.

The results of the Deloitte survey was based on 108 responses to the poll that the organization had got from senior executives at multinational companies, state-owned enterprises and privately owned firms that are operational in mainland China, Hong Kong and Macau. The time of the survey was between September and November.

Deloitte said that among the respondents, about 69 per cent were holding positions at the level of CFO or finance director and about 8 per cent of them were at the level of vice president.

There would be decline in trade volumes in the next year believed 59 per cent of the respondents of the survey and 56 per cent opined that the rising tariffs in China and the US are already impacting or are expected to affect their companies.

Southeast Asia would see the largest increase in export volumes, said 53 per cent of the executives in the survey when asked which countries or \regions would be the most benefited by the shifting trade patterns Because of the tariffs. Just 9 per cent chose China as the beneficiary.

“Southeast Asia has been developing itself as a manufacturing hub and the changes may provide it unforeseen opportunities,” Deloitte said in its explanation of the results.

“The region may also benefit from companies shifting manufacturing capabilities to avoid some of the trade protectionist measures,” the consultancy added.

(Adapted from CNBC.com)

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