SEB's China Financial Index: Rebound for North European companies. Increased demand and higher profit expectations
(Thomson Reuters ONE) -
China's economy bottomed out during the second half of 2012, and an increasing
number of indicators now point to improved business conditions. Government-led
stimulus packages, relatively loose monetary conditions and positive export
figures have contributed to an improved business climate. Half of top managers
at North European companies in China now have a positive view on the market and
profit expectations in the region. After three consecutive surveys with falling
sentiment, SEB's China Financial Index in March increases to 60.8 from 56.1 in
September.
The percentage of surveyed companies that see lower customer demand as a main
concern has fallen from 70 per cent to just above 40 per cent. Companies have
increased expansion plans slightly in China, and two out of three respondents
plan further investments. 15 per cent of companies plan significant investments,
which is the same number as in September. A bit more than half of the companies
plan further recruitment, which is higher than the last survey.
"Optimism among companies has increased since the last survey, and it is evident
that order books are looking better than in September. Investment plans are also
increasing albeit only marginally, as some manufacturing companies still have
overcapacity in China and are awaiting more signs of a robust rebound in the
economy. Furthermore, companies did not slow investment plans much last year,
despite negative economic signals," says Fredrik Hähnel, Head of SEB in Shanghai
and author of the report.
The Chinese economy grew by 7.9 per cent during the fourth quarter 2012 compared
to 7.4 per cent for the third quarter. Several indicators in China now point in
the direction of a modestly rebounding economy, and full-year growth for 2013
looks to be better than in 2012. During 2013, SEB economists expect China to
grow by 8.1 per cent.
Increasingly positive signals in China make North European companies more
optimistic about the future in the region. Around half of respondents now have a
positive view of the coming six months, whereas the number of companies with a
negative view has fallen from one-third to only ten per cent. The remaining
forty per cent have a neutral view. Slightly less than half of the companies
expect profits to increase, which is an increase from the last survey. Very few
companies believe that profits will fall in the coming six months.
"Regardless of whether you believe the current Chinese growth model is
sustainable or not, it is obvious that governernment stimulus for infrastructure
and other projects at the end of last year is having a positive effect on
business conditions for industrial companies. Meanwhile, private consumption
should increase in China for many years to come, which is why companies selling
directly to Chinese consumers are generally more positive than industrial
companies," says Hähnel.
44 per cent of respondents see lower customer demand as a main concern, which is
down from 70 per cent in the last survey. 16 per cent view competition as their
largest concern. Other important issues are a complex regulatory system and lack
of qualified staff.
"That fewer companies worry about a fall in customer demand further strengthens
the picture that the order book is improving. It is also obvious from the survey
that there is a shift towards more concern over increasing competition, as
foreign investors see an increasing number of Chinese competitors moving up the
value chain and taking market share," says Hähnel.
Half of respondents believe that the renminbi will strenthen against the US
dollar. Seven out of ten companies anticipate higher interest rates. One-third
of the companies also expect salaries to increase by 7-8 per cent in 2013 while
four out of ten companies calculate with a salary increase of 9-10 per cent or
more - a rate well above the 2 per cent annual inflation level in China in
January.
"The competition for competence is fierce, and employees are still faster-moving
when it comes to recruitment compared to most developed markets," says Hähnel.
This is the ninth edition of SEB's China Financial Index, a unique semi-annual
survey. The purpose is to mirror changes in expectations among North European
companies in China in order to facilitate understanding of economic and
financial development in the country. The survey was carried out from 18-22
February, and includes a total of 12 questions related to the business climate,
investment plans, recruitment plans and the view of currencies and interest
rates. An index level over 50 signals overall positive sentiment. The full
report can be downloaded from: www.sebgroup.compress.
For further information, please contact Press Contact
Fredrik Hähnel, Head of SEB in Shanghai Anna Helsén, Press Officer
+86 1381 680 99 77 +46 70 698 48 58
fredrik.hahnel(at)seb.se anna.helsen(at)seb.se
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SEB is a leading Nordic financial services group. As a relationship bank, SEB
in Sweden and the Baltic countries offers financial advice and a wide range of
financial services. In Denmark, Finland, Norway and Germany the bank's
operations have a strong focus on corporate and investment banking based on a
full-service offering to corporate and institutional clients. The
international nature of SEB's business is reflected in its presence in some
20 countries worldwide. On December 31, 2012, the Group's total assets
amounted to SEK 2,453 billion while its assets under management totalled
SEK 1,328 billion. The Group has about 16,500 employees. Read more about SEB
at www.sebgroup.com.
Press release (PDF):
http://hugin.info/1208/R/1682789/550573.pdf
China Financial Index March 2013:
http://hugin.info/1208/R/1682789/550574.pdf
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: SEB via Thomson Reuters ONE
[HUG#1682789]
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Datum: 05.03.2013 - 08:01 Uhr
Sprache: Deutsch
News-ID 235854
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