Looking at the individual index components, optimism regarding order intake over the next six months declined in the latest survey, decreasing to 59 from 65.7 in the spring. At the same time, the sub-index measuring investments increased to 62.1 from 59 in the spring, indicating a clear intention to continue investments in China primarily through the expansion of existing business.
The latest edition of the China Financial Index also shows that decoupling, regulations, and data and cyber security are among topics that are of concern to executives. For example, about 60 percent of respondents now say China has become more regulated and that that is making it more difficult to do business in the country, which is an increase of about 11 percentage points from the spring.
The biggest concern over the coming six months, however, is now supply chain disruption, which is the main worry among 36 percent of respondents. In the spring survey, it was material costs that were cited as the biggest concern due to the surge in commodity prices.
“As the world continues to focus on the recovery amid the COVID-19 pandemic, corporates remain optimistic about doing business in China and the latest China Financial Index contains no big surprises,” says Thilo L. Zimmermann, General Manager of SEB Shanghai. “As domestic growth in China has slowed somewhat, it seems that they have adjusted their optimism accordingly but that they remain committed to operations in China.”
About the survey
SEB’s China Financial Index is a unique semi-annual survey, whose purpose is to mirror changes in expectations among northern European (Nordic, German, Austrian, Swiss and UK) corporates in China, in order to facilitate understanding of economic and financial developments in the country. The latest survey was carried out between 6-20 December 2021 and includes a total of 20 questions related to the business climate, investment plans, recruitment plans and views on currencies. An index level above 50 signals overall positive sentiment.