CEO sentiment in China sours amid slowdown risks, survey finds

Confidence among China-based CEOs in the second half of this year deteriorated against the backdrop of “the top three major risks” – China’s economic slowdown, more intensive local competition and geopolitical tensions – a new survey has found.

The index of CEO confidence declined to 49 for the second half compared with 56 in the first half of this year, and this “was driven by growing concerns about current and near-term business conditions within the Chinese economy”, according to US non-profit think tank The Conference Board.

The confidence survey, conducted every six months, aims at tracking sentiments of China-based CEOs of mostly US and European multinational companies. A reading of less than 50 on a scale of 0-100 reflects more negative than positive responses.

“Conditions facing multinational businesses operating in China are currently extremely challenging, with 76 per cent of CEOs citing China’s economic slowdown as the biggest risk facing their business,” said Alfredo Montufar-Helu, head of the think tank’s China Centre, adding that customers are “highly price-sensitive” and seek “steep discounts”.

Responding to the survey that was fielded between September 30 and October 28, 41 per cent of CEOs out of 34 participants said that current business conditions were worse than six months prior – a substantial increase from 23 per cent in the first half of the year.