Chinese executives have grown more optimistic about their country’s economic outlook, a survey by consultancy EY reveals.
Despite talk of a hard landing for the Chinese economy, executives were more optimistic in a poll carried out in October than in a previous one in April.
In the survey of executives in big economies, Chinese executives were the second most optimistic on the outlook for their country’s economy, after US ones.
By contrast, the optimism of executives in the rest of the BRIC countries – Brazil, India and Russia – fell sharply from April to October.
“Given that China and the US are the two largest economies in the world, a positive outlook for their local economies translates into a positive outlook for global growth and stability,” the EY report said.
The survey comprised 112 executives from Greater China, 162 respondents from Brazil, India and Russia and more than 400 from the US.
The executives were from 18 sectors, including financial services, consumer products and retail, technology, life sciences, automotive and transportation, oil and gas, power and utilities, mining and metals, diversified industrial products and construction.
When considering the prospects of the global economy, Chinese executives were the most optimistic, followed by American executives.
Again, Brazilian, Indian and Russian executives were much less optimistic than in April: 35% saw the global economy improving in October, compared with 54% in the spring.
The survey also reveals a divergence in executives’ views on the main risks to their businesses.
While Chinese executives and American ones see geopolitical worries and the impact of the end of the Fed’s quantitative easing as the biggest risks, the ones in Brazil, India and Russia fear the slowdown in emerging markets.
“This reflects Brazil, Russia and India’s reliance on less mature economies, and indicates that China has moved out of the ’emerging market’ category,” EY said.
Chinese executives and American ones have similar views when it comes to mergers and acquisitions.
When it comes to their outlook for the global M&A market, 73% of Chinese executives and 81% of US executives see it improving.
This is in sharp contrast with Brazil, India and Russia where only 36% expect the global M&A market to improve in the next 12 months.
At the local level, the picture looks similar; 78% of Chinese executives see the Chinese M&A market improving, and 81% of American executives see the US M&A getting better.
Only 40% of executives in Brazil, India and Russia see their respective M&A markets improving.
When it comes to the outlook for their own company, Chinese executives are the most optimistic: more than half expect to complete an acquisition, compared with only a third of US executives in the survey.
Chinese executives’ appetite for buying assets overseas is much better than that of fellow BRIC executives. They especially look for acquisitions in developed markets such as Australia, Japan, UK and US.
The Chinese respondents said their acquisition strategy toward and focus on investing in developed economies has increased.