34 per cent expect business conditions in
China to improve by end of decade, while 63 per cent have positive expectations
for India
·
A survey of CEOs from Europe's 60 largest non-financial
companies found growing confidence in India and continued caution toward China.
·
Only 34%
of respondents had a positive long-term outlook for China's business
environment, while 23%
were negative.
·
European CEOs were significantly more optimistic about
India, with 70%
expressing positive or very positive views and only 4% negative.
·
58% of CEOs said the European Union should give its
relationship with India a "very high priority," compared with 53% for the United
States and 42%
for China.
·
India was viewed as an important partner for trade,
investment, supply chains, technology, security, and climate cooperation.
·
Global economic sentiment deteriorated, with two-thirds of
CEOs reporting worsening conditions and more than half expecting further
decline over the next six months.
·
Energy security emerged as the top concern following the
conflict in the Middle East.
·
Most companies are not significantly increasing sourcing
from Europe despite geopolitical uncertainties.
·
Confidence in Europe's business environment improved
slightly to 48%,
supported by better investment and sales expectations.
·
Employment expectations in Europe continued to weaken.
·
More than 60%
of respondents viewed Europe's long-term business conditions negatively, while
only 11%
expected positive conditions.
·
75% of CEOs doubted the EU Single Market would be completed by
2028, and 65%
were skeptical it would be completed even by 2030.
·
The survey highlights a growing strategic preference among
European businesses for India as a long-term growth and investment destination.
European
CEOs remain cautious about China’s long-term business prospects, according to a
new report, with more now ranking their relationship with India a higher priority
amid challenging global macroeconomic conditions.
Asked
about their expectations for business conditions in China more than three years
down the road – in terms of regulatory stability and simplicity, openness and investment
attractiveness – 34 per cent of respondents to a survey were positive, 34 per cent
were neutral and 23 per cent were negative, The Conference Board and the European
Round Table for Industry said in a joint report published on Friday.
It
was based on a survey of the heads of Europe’s 60 largest non-financial companies
in April.
The
numbers suggested more favourable views about China in the long term, beyond three
years, than in the medium term, since a report published last year showed only 8
per cent of respondents were planning to invest more in China, said Alejandro Fiorito, an economist at The Conference Board.
But
the new survey found European CEOs were much more enthusiastic about India, with
63 per cent of respondents positive, 7 per cent very positive, and just 4 per cent
negative. Fifty-eight per cent of respondents said the European Union should give
its relationship with India – across areas including trade and investment, supply
chains, technology, security, and climate and energy – “very high priority”, compared
with 53 per cent for the United States and 42 per cent for China.
The
CEOs’ relative optimism about outside markets was underpinned by short-term worries
about the global economic situation and pessimism about business conditions in Europe.
Global
macroeconomic sentiment soured for both current conditions and the six-month outlook,
with two-thirds of respondents judging conditions already worse and more than half
expecting them to keep sliding. Following the war in the Middle East, energy security
was cited as the top concern.
Those
concerns do not appear to be prompting European CEOs to look for economic security
closer to home. More than half of respondents said they were not increasing sourcing
from Europe and 46 per cent were only doing so moderately.
However,
48 per cent expressed confidence about business in Europe, up from 44 per cent in
the second half of last year. While employment expectations further eroded, improving
investment expectations and a strong jump in sales expectations contributed to the
improvement in confidence.
Three
quarters of respondents said they did not believe the European single market would
be completed by 2028, as envisioned by the European Commission, and 65 per cent
doubted it would be completed by 2030.
More
than 60 per cent deemed Europe’s long-term business conditions to be negative, with
only 11 per cent expecting them to be positive.