9th Greater China Capital Confidence Barometer

Growth strategies – innovation and new markets

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As GDP slows at home, more than three-quarters of Chinese companies are firmly focused on growth, well above their global and BRIC counterparts.

However, continuing uncertainty about the local economic environment has left Chinese executives divided around growth strategies for their excess cash. Among those looking to return money to stakeholders, the overwhelming majority of Chinese investors plan to pay down debt.

Slowing economic growth is focusing corporate strategies on growth

Over the next 12 months, growth is the strategic focus of 77% of Chinese companies, up from 64% in April 2013 and 45% in October 2012.

Yet excess cash is still posing a dilemma for the risk-averse

Chinese companies are essentially divided over where to deploy excess cash, with those preferring to invest split between organic and inorganic growth options.

Meanwhile, more than twice as many respondents, say they would opt for using excess cash to pay down debt.

A higher appetite for new markets and product channels

Chinese executives are most likely to channel their organic growth plans toward core products and existing markets. Notably, 24% said they plan to use innovation to develop new markets and products over the next 12 months compared with only 16% of their global counterparts.

Q: Which statement best describes your organization’s focus over the next 12 months?

EY - Which statement best describes your organization’s focus over the next 12 months?
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Which statement best describes your organization’s focus over the next 12 months?

EY - Which statement best describes your organization’s focus over the next 12 months?
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