Business leaders in the Asia-Pacific are losing confidence in their revenue prospects because of China’s cooling economy and perceived higher risks in emerging markets, a survey released Monday showed.
Just 28 percent of businessmen with investments in Asia Pacific Economic Cooperation (APEC) economies said they were “very confident” revenues would increase in the next 12 months, PricewaterhouseCoopers said as it released the survey.
That was down from 46 percent last year and the lowest business confidence score since 2012, when the survey was first carried out ahead of the annual APEC summit.
This year’s study polled 800 chief executive officers, PwC said.
“Slowing demand from China, the catalyst for intra-regional trade, is moderating expectations across industries and geographies. More broadly, growth risks continue to tilt towards emerging markets,” the report said.
“After a year of historic foreign direct investments into developing Asian economies, CEOs have become hypersensitive to financial market signals.”
China’s gross domestic product grew 7.3 percent last year, the slowest expansion since 1990.
In the July to September period this year, growth was 6.9 percent, the slowest in six years, according to government data.
Chinese President Xi Jinping said this month 6.5 percent growth this year would be enough to meet the country’s 2016 to 2020 growth goals.
An impending interest rate increase and leadership change next year in the United States, as well as elections scheduled in the Philippines, Singapore, Thailand, Taiwan and Peru, were adding to investors’ worries, the PwC report said. The APEC, which groups 21 economies including includes China, the United States and Russia, aims to foster open markets among its members.
The PwC survey showed 60 percent of CEOs in APEC believe the bloc was on the right path towards deeper economic integration, with 24 percent saying a Pacific free-trade area could be set up by 2020.