Business / Economy

Business leaders remain optimistic despite economic slowdown

By Hu Yuanyuan ( Updated: 2015-12-28 13:27

Business leaders in China remain optimistic despite the projected GDP growth slowdown, a recent Pricewaterhouse Coopers' (PwC's) survey showed.

The rebalancing of its economy has led to a decline in confidence in revenue prospects for the 12-month timeframe but for the three-to-five-year timeframe confidence holds steady, according to the China cut of the APEC CEO Survey 2015.

The untapped opportunities mainly come from the consumptions sector as the investment driven growth is gradually replaced by the consumption-led one. According to the data released by National Development and Reform Commission, in the first three quarters of 2015, consumer demand contributed 58.4 percent of total GDP growth, up 9.3 percent from a year earlier, showing its growing impacts on economic growth.

"The second generation of middle class is emerging in China. They have very different consumption pattern compared to the first generation, as shown by several business indicators, such as the volume of flights, logistics and express. These trends will continue to facilitate the economic growth in the 13th Five-year period," said David Wu, PwC China Beijing Senior Partner.

The PwC report showed that 84 percent of business leaders in China agreed that businesses have significant influence on enlarging the middle class while 70 percent of them agreed that government policies to promote middle class growth are making significant tangible progress in China.

Additionally, 72 percent of the Chinese business leaders thought that it is likely that the secondary cities in China will rise to become centers of regional economic importance by 2020.

"We believe that the consumption demand will expand steadily over the next five years," said Wu.

Meanwhile, China's financial liberalization reforms also represent opportunities as greater diversity of financial instruments is expected to stimulate consumption and risk diversification and the survey findings confirm that 87 percent of executives in China think demand for financial services is poised to expand and 85 percent of executives think that demand for risk mitigation services will rise.

The findings show that 67 percent view it as likely that the Chinese yuan will become a global and viable reserve currency by 2020. The growing importance of the renminbi in trading was borne out by IMF's recent announcement that the renminbi will be included in its SDR basket.

While there are opportunities in digital and new technologies such as the Internet of Things or 3D printing, there is also recognition of risks as 28 percent said that cyberattacks or Internet disruption would affect operations.

"Overall, for Chinese business leaders, the outlook is favorable in terms of technologies driving transformation and movement of goods, services and people while outbound investment is on the rise," Wu added.

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