CEOs look to Asia’s domestic markets to drive future revenues as more than 40% of CEOs plan to increase headcount by at least 5%.
More than half of CEOs in the Asia-Pacific region are ‘very confident’ of increased revenue for their companies over the next three to five years, up slightly from a year ago. More than 40% of CEOs say their single greatest opportunity for growth will stem from the rise in spending power in Asia, particularly in China. These were the key findings from a survey by PwC of more than 320 CEOs across 26 countries, including the 21 APEC economies, for the Asia-Pacific Economic Cooperation (APEC) CEO summit.
To drive growth CEOs are seeking to expand in Asia’s fast growing consumer markets and to extend their presence in the evolving markets for services. Over 40% of planned investments, both by domestic Chinese and non Chinese companies, are targeted on China.
The CEOs surveyed remain confident that the economy of the Asia-Pacific region will continue to prosper despite the weak economic recovery in the United States, financial uncertainty in Europe and the tsunami and earthquake that struck Japan earlier this year.
However nearly one-third of CEOs said the weak US recovery had impacted their companies ‘to a great extent,’ while 17% said they had been strongly affected by conditions in Europe.
"The opportunities in the APEC economies for the remainder of this decade will be different from the past 10 years. Going forward, developing domestic Asian markets will replace low-cost manufacturing exports for mature economies as the main driver of economic growth in the region”, said Dennis Nally, chairman of PwC International Ltd, who will speak at the opening session of the APEC CEO Summit on November 11th.
“Consumer markets are the driving force for investment,” said Frank Lyn, PwC China Markets Leader. “Those investing in China are directed towards access to consumer markets, while a new wave of investment is also flowing to expand footholds in China’s evolving marketplace for services. The survey shows that close to a third of investments will develop an R&D, managerial or financial presence in that country.”
Among other findings of the survey:
CEOs in the APEC region recognise that cooperation between business and government is critical to economic competitiveness and social well being in the region. They cited financial sector stability as the top way in which companies can work more closely with government, followed by spreading economic access and opportunity across the population and promoting sustainable growth.
"CEOs in the APEC region see a future in which their countries evolve from 'producer only' economies to 'producer and consumer' markets. That change will require deeper capital markets, streamlined supply and distribution channels, and more consistent regulation with less corruption. Achieving those goals will require unprecedented cooperation and is something that CEOs look forward to political leaders addressing at next week’s APEC summit," Mr. Nally said.
“Free trade, increasing innovation and creating the right environment through the rule of law are a key part of the APEC CEO Summit. This survey of APEC CEOs will provide essential context for what we believe will be a very productive meeting next week,” said Craig Mundie, chair of the APEC CEO Summit and chief research and strategy officer, Microsoft.
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