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China Capital Confidence Barometer - Economic outlook - EY - China

China Capital Confidence Barometer, March 2012 - August 2012

Economic outlook

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What is your perspective on the state of the local economy today?

What measures/plans are you putting in place to manage risk or take advantage of opportunities presented by the Eurozone crisis?

China respondents

What measures/plans are you putting in place to manage risk or take advantage of opportunities presented by the Eurozone crisis?

Global respondents

Cross border activity in the Asia-Pacific region is increasingly perceived as a barometer for the global community’s economic health.

In the 6th global survey, we found economic outlook, optimism, business health and willingness to divest or engage in M&A activity varied by market across Asia-Pacific.

Which markets are likely to pursue acquisitions in the next 12 months?

Singapore Indonesia Malaysia Mainland China South Korea Australasia
58% are likely 35% are likely 50% are likely 22% are likely 4% are likely 32% are likely



Cross border activity in the Asia-Pacific region is increasingly perceived as a barometer for the global community’s economic health.

In the 6th global survey, we found economic outlook, optimism, business health and willingness to divest or engage in M&A activity varied by market across Asia-Pacific.

Which markets are likely to make asset sales or divestments in the next 12 months?

Singapore Indonesia Malaysia Mainland China South Korea Australasia
33% are likely 43% are likely 35% are likely 9% are likely 12% are likely 23% are likely





The global economy appears to have recovered its equilibrium in the past few months, following an extended period of macroeconomic instability.

Against the more volatile political and economic conditions in China recently, Chinese survey respondents share the more upbeat mood with regard to their view of the global economy, although they are slightly more pessimistic about the prospects for their local economy, compared both with global peers and with their sentiments six months ago.

More upbeat about global economy

A significant majority (69%) of Chinese respondents said the global economy was improving, compared with 52% in the global sample. Just 19% of Chinese respondents saw improvement six months ago. 

Stable local economy

Chinese respondents were more likely to view their local economic conditions as stable (73%) than improving (18%), while global executives were more upbeat, with 50% seeing improvement in the state of their local economy, compared with 36% who viewed it as stable. 

This development reflects a broader trend in the survey, where mature economies report an improvement in sentiment while emerging markets have become less optimistic.

 

Eurozone crisis in focus

The Eurozone crisis continues to present both challenges and opportunities. Both Chinese and global respondents identified revenue and margin pressures, increased regulation and credit availability as the top three challenges facing their business as a result of problems in the Eurozone. 

Yet, when asked how they planned to manage risk or take advantage of opportunities stemming from the Eurozone crisis, Chinese respondents were nearly twice as likely as their global counterparts to consider M&A, with 42% choosing this option, compared with 22% of global executives. 


 

 



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