CEOs reinforce bright growth outlook for firms
CEOs of Chinese companies have a more optimistic corporate growth outlook than their global peers, according to an industry survey.
Domestic CEOs also have a stronger intent to invest in advanced technologies and pursue mergers and acquisitions, or M&As, for future growth.
According to the 2018 Global CEO Outlook, a survey report published by KPMG based on responses of 1,300 CEOs across a wide range of industries, China head honchos’ confidence in the growth outlook for their companies remains unchanged at a high level of 90 percent, same as in 2017.
Among the CEOs surveyed were 125 from the Chinese mainland and Hong Kong. Some 84 percent of the surveyed Chinese CEOs expect an overall increase in their organization’s headcount over the next three years. Some 44 percent of Chinese CEOs expect an increase of more than 5 percent in their staff.
“Chinese CEOs have grown more positive about the prospects of the global economy and their respective industries,” said Benny Liu (pictured), chairman of KPMG China. “This positive outlook comes at a time when China’s significance in the global economy continues to increase.”
China’s influence on the global economy, according to Liu, has gradually become more pronounced, with the spillover effect of its economy and policies having an increasingly larger impact across countries.
Against a backdrop of weak global growth, and a slowdown in cross-border investment and international trade, the recovery and steady growth in higher-quality investment into and out of China will support the vitality and resilience of global trade and investment flows, the survey report said.
“Over the long term, Chinese outbound investment and China market demand will play a key role in the global economic recovery and the development of a new, more ‘inclusive’ model of globalization,” Liu said.
Consistent with the results of KPMG’s previous surveys, innovation continues to receive much mind-share of Chinese CEOs. They see innovation as a way to transform their businesses and achieve their growth ambitions.
Technological disruption is not seen as a threat but as an opportunity to collaborate with innovative startups, create a more digital-friendly workforce, and invest in big data analytics, artificial intelligence or AI and other advanced technologies.
KPMG’s latest report on disruptive technologies notes that AI is developing rapidly in China. AI is closing the technological gap between China and other advanced countries as the country has a deep talent pool and a large amount of available data.
Consistent with this, more than half of the Chinese CEOs surveyed said they have begun limited implementation of AI, with the key benefits expected being the improvement of data analytics capabilities, data governance and customer experience.
In addition, nine in 10 Chinese CEOs expect a significant return on investment or RoI from AI in five years or less, with 32 percent looking for a significant ROI in less than three years.
“We are also seeing a strong appetite for M&As, with a focus on overseas investments into emerging markets,” said Liu. “Partnerships and strategic alliances are also emerging as an attractive growth strategy, and we continue to work closely with both Chinese and international firms to help them secure the right partners as they invest in and enter new markets.”
China-led Belt and Road Initiative and development in the Greater Bay Area that encompasses Shenzhen, Hong Kong and Macau are helping drive trade, investment and economic growth in the region, he said.
90 percent average level of CEOs’ confidence in the growth outlook for companies this year, according to KPMG