PwC launches the China report of the 21st Global CEO Survey: China firms seek growth through technology and trust. The survey found that a record 57% of chief executives believe the global economy will grow faster next year – up from 29% last year.
This optimism is outstripped by China’s CEOs – 69% expect faster growth over the next 12 months, against 31% last year.
The survey shows the US and China are still regarded as being attractive markets for growth, the attractiveness of China is stable. For the executives in China, the US and Hong Kong continue to be the top two growth markets while Japan has replaced Germany as the other top market for growth this year.
Indeed, the vast majority of Chinese respondents (81%) expect a world of regional trading blocs rather than a single global marketplace in the future. 60% also expect to see greater fragmentation as opposed to political union. Despite this, 70% of China’s CEOs believe there will be greater harmonisation of global tax rules, compared to 41% for the global average.
“While more (64%) are seeking new alliances or joint ventures, 62% cite organic growth and cost reductions as still top priorities. Also, 45% are collaborating more with start-ups and 44% are seeking M&A for growth. What is more, 89% are anchoring their investment strategies to major China national strategies, such as, the Belt and Road Initiative, the development of the Beijing-Tianjin-Hebei City Cluster and the Greater Bay Area,” says Frank Lyn, PwC China and Hong Kong markets leader.
While the survey reveals a particularly upbeat view of economic prospects, CEOs still cite geopolitical uncertainty, the future of the Eurozone and protectionism, and increasing tax burdens as main threats to the future growth of their business.
Looking closer to home, a high proportion of executives surveyed (92%) are concerned about availability of digital skills in their industry. Our survey found that a higher proportion of businesses in China (84%), compared to the global average of 67%, are working towards retraining and skill development of the workforce impacted by automation.
In addition, around a third of respondents are concerned about declining levels of trust from both their workforce (35%) and their customers (34%). This is sharply higher than the global average (19% and 18% respectively).
Strategies for remedying the situation with their staff include greater transparency around HR issues and promoting more diversity and inclusion.
In order to build trust with customers, around half of respondents are investing heavily in cyber-security and creating greater transparency in their use and storage of data.