China tops APEC CEOs' picks for investment: survey
Updated: 2013-10-05 13:47
BEIJING -- Despite signs of an economic slowdown and capital outflows, a PricewaterhouseCoopers (PwC) study of chief executive officers (CEOs) in Asia-Pacific Economic Cooperation (APEC) countries found 68 percent are planning to increase investments.
Over the next year, executives believe rapid urbanization, the expanding middle-class and a burgeoning demand for infrastructure will continue to generate new growth, PwC said Saturday.
China tops CEOs' picks for investments in the next three to five years, followed by Indonesia and the United States, according to the survey of 500 business leaders.
"China has been recognized by global CEOs as a key destination for business investment in the future thanks to its competitive production costs and growing technological skills," said David Wu, PwC Beijing senior partner.
"China understands the need for urbanization and greater investment in infrastructure. This complements the desire for environmentally friendly and low-carbon projects outlined by the National Congress as part of the 12th Five-Year Plan," Wu added.
Enjoying an almost infinite supply of cheap labor, easily obtained credit and an economy that never stopped running, many multinational corporations struck gold by helping turn a one-time economic backwater into the world's factory floor that churns out everything for everywhere.
But as GDP growth slowed, wages surged and financial risks increased, economists warned the world's second largest economy, the engine driving global growth, could be losing steam.
The CEOs, however, still think the Chinese economy is best prepared to handle changes, describing macroeconomic stability and regulatory consistency the most important qualities that help an economy bounce back from disruption, according to the PwC survey.
The survey also found confidence among Asia Pacific-based executives is on the rise. Forty-two percent of executives said they are "very confident" of revenue growth in the coming year, up from 36 percent in 2012.
According to the study, the trend toward urbanization in many Asia Pacific economies, the emergence of the middle class, and the need for infrastructure contributes most to the increase in confidence.
About 87 percent of the CEOs said middle-income consumers will influence their growth strategies. Nearly half of investment increases will center around new product development, services and distribution capabilities. A quarter of CEOs surveyed plan "significant" changes to product mixes, distribution, brand and customer service strategies.
The survey also found regulatory inconsistencies among Asia Pacific economies are holding back more investment in the region. A fifth of CEOs said they were "highly likely" to invest more if rules concerning intellectual property, corporate governance and services were harmonized across the region.
PwC surveyed nearly 500 business leaders on their attitudes towards doing business in the region for the study titled "Towards resilience and growth: Asia Pacific business in transition".