In line with their global peers, short-term confidence among China’s CEOs has returned. About 47% are "very confident" in their company’s growth prospects over the next 12 months, up from the record low of only 40% last year, according to an annual global CEO survey conducted by PricewaterhouseCoopers.
In 2013, China’s GDP grew by 7.7% with 13.1 million new jobs created. The outlook is equally strong, with China expected to reach its 7.5% growth target for 2014.
China’s CEOs are focused on their domestic market. Only 5% of CEOs in China are looking for new geographic markets for growth, compared with the global average of 14%.
In 2013, China’s services sector overtook the industrial sector for the first time as the main contributor to GDP. In the same year, the GDP of central and western parts of China grew to 44% of the country’s total. By 2020, four in ten people in China will belong to its middle class.
Despite a strong domestic focus, China’s CEOs are still looking for offshore deals. The outlook for China’s outbound deals in 2014 remains steady with 18% expecting to complete a cross border deal in the next 12 months, similar to the 19% recorded in 2013.
In 2013, Chinese companies invested more than US$90 billion offshore. The Chinese government has said total offshore investment is expected to reach US$500 billion over the next five years.
China’s CEOs are also focused on innovation. About 52% of them see their best prospects in new product or service innovations, compared with global average of 35%.
About 38% of CEOs in China say they are most likely to initiate or complete innovation capacity-related programs for their companies. China is on track to become the world’s number one investor in research & development (R&D). At the current rates of growth, China’s investment could surpass that of the U.S. by early 2020.
China’s CEOs are also focused on taking advantage of technological changes. Nearly one in three people in China have a 3G/4G mobile subscription. In 2014, China’s government plans to speed up its 4G mobile network program, build 100 million fibre optic networks in cities and extend broadband connectivity to villages.
By 2020 there will be nearly 50 billion networked devices on the planet. That’s seven times more than the world’s total population.
CEOs are thinking about how technology changes their relationship to their increasingly mobile, digitally connected customer base, but also how it may impact their business model itself.