Confidence amongst China CEOs hits lowest post-COVID

Around 41% CEOs said business conditions are worse than six months ago.

Confidence amongst locally-based CEOs of multinational companies in China has hit its lowest point since the country ended its zero-COVID policy in late 2022, according to a report by the Conference Board.

The Conference Board Measure of CEO Confidence for China, which saw a slight improvement in the first half of 2024, fell below the 50-point threshold in the second half, dropping to 49 from 56 six months earlier. 

This decline reflects an increase in negative responses and is evident across all three sub-indexes, namely the current business conditions, future business conditions, and future industry conditions, the report added.

The report highlighted growing pessimism regarding current business conditions, with the relevant sub-index dropping to 43, compared to 53 in the first half of the year. Furthermore, 41% of CEOs said business conditions are worse than six months ago.

Despite this downturn, 57% of CEOs noted that profits generated in China remain higher than those from other regions, reaffirming China’s continued importance as a growth driver amidst global economic uncertainty.

Looking ahead, CEO optimism for the long term remains stronger, with 65% predicting Chinese demand to exceed the global average and 32% expecting it to align with major global markets over the next five years, the report said.

According to Alfredo Montufar-Helu, head of the Conference Board’s China Centre, 76% of CEOs identified China’s economic slowdown as the biggest risk to their businesses. 

Many are grappling with price-sensitive consumers demanding steep discounts or delaying purchases, further exacerbated by local competitors’ agility in responding to market changes and willingness to take risks or cut prices to gain market share, he added.