33% of CEOs in China, Hong Kong are "very confident" of revenue growth: PwC

They see Hong Kong as among the best cities for growth prospects.

PwC launches the China report of the 20th Global CEO survey: Leading through disruption. The survey finds that 33% of senior business executives from Mainland China and Hong Kong are “very confident” about their companies’ prospects for revenue growth over the next 12 months, increased from 25% in 2016.

Meanwhile, the ‘Belt and Road’ initiative is considered as a key part of organisation’s business expansion strategy, as nearly 60% of executives in China saw investment opportunities emanating from the initiative, especially in infrastructure development.

China’s executives were more positive than their peers about global economic growth over the next 12 months (China 31% vs. globally 29%). Executives in Mainland China and Hong Kong considered Beijing, Shanghai and Hong Kong as the most attractive cities to organisation’s overall growth prospects over the next 12 months, whereas New York and Singapore are ranked in fourth and fifth respectively.

“Despite a turbulence in 2016, China’s CEOs are moving back up. They are more confident in the opportunity for growth over the next 12 months,” says Frank Lyn, Senior partner of PwC Hong Kong. “Meanwhile, China is still considered as one of the most attractive investment places in the world. The ‘Belt and Road’ initiative will provide more investment opportunities for companies and help to improve the business environment in the coming months.”

To drive their growth strategy and profitability in the next 12 months, high proportion of executives in China cited organic growth (67%), entering into a new strategic alliance/joint venture (54%) and new M&A (32%) as the primary activities. Strengthening innovation and digital capabilities are necessary to capitalize on new opportunities.

The labour market is facing a mismatch of skills demand and supply. Nearly 60 percent of executives in Mainland China and Hong Kong expect to increase their headcount in the next 12 months. However, 85% are worried about the availability of key skills and they find “somewhat” or “very difficult” to recruit people with creativity and innovation (79%), leadership (70%) and problem-solving skills (64%).

Companies in China are leading the world in the application of technology by adopting and prioritising digitisation in order to capture economic and productivity benefits. Nearly half of the respondents in China believe that technology is to be used to improve people’s well-being. But China’s CEO also have serious concerns on cybersecurity and data privacy breaches, amongst the CEOs surveyed in China 66% of them “agree” or “agree strongly” that how they manage people’s data will differentiate them from their competitors. Given the lack of trust in the digital age, companies will have to build and sustain stakeholder trust and confidence through actions such as enhanced management of cybersecurity, digital and data risks.