POSTED: 7:02 a.m. HST, Nov 3, 2011
LAST UPDATED: 10:31 a.m. HST, Nov 3, 2011
Chief Executive Officers in 26 countries across the Asia-Pacific region plan to make their largest investments in China, according to a survey of more than 320 CEOs by PricewaterhouseCoopers.
The survey, conducted July through September, found 44 percent of CEOs surveyed planned to make their biggest investment in China in the next three to five years, with 10 percent naming the U.S. The trend held across industries, including companies focused on consumer demand, manufacturing, finance, managerial services as well as research and innovation.
The plans for future investment reflect surging growth in China, the world’s second-largest economy, at a time when the U.S. and European economies are still recovering from the effects of the 2008-09 global financial crisis. China’s economy expanded 9.1 percent in the third quarter compared with third- quarter growth of 1.6 percent in the U.S. and expansion in Euro- zone economies of 1.6 percent in the second quarter.
The CEOs surveyed said the main driver of growth for their companies in the next three to five years would come from the increased spending power of consumers in Asia, particularly those in China. The survey was conducted for the Asia-Pacific Economic Cooperation CEO summit in Honolulu next week, which will run parallel to a meeting of Asia-Pacific leaders including President Barack Obama, Chinese President Hu Jintao and Japanese Prime Minister Yoshihiko Noda.
“Developing domestic Asian markets will replace low-cost manufacturing exports for mature economies as the main driver of economic growth in the region,” Dennis Nally, chairman of PricewaterhouseCoopers International Ltd., said in a statement.
Foreign direct investment in China grew in September at the slowest pace in three months, gaining 7.9 percent to $9 billion, China’s Commerce Ministry reported on Oct. 19. Inbound investment in the first nine months of the year rose 16.6 percent to $86.7 billion while outbound nonfinancial investment rose 12.5 percent to $40.8 billion, the ministry said.
The CEOs named corruption as one of their biggest impediments to building their businesses in the region in the next three to five years, with 32 percent saying it affected them to a great extent and an additional 54 percent saying it affected them to some extent.
Russia, China, Mexico and Indonesia, all APEC members, were ranked by Berlin-based Transparency International this week as the four countries whose companies are most likely to pay bribes abroad.