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SEB’s China Financial Index indicates rising optimism

SEB's China Financial Index, which measures the business outlook among northern European companies' subsidiaries in China, rose to 55.8 in the autumn of last year from 54.9 in May.

That indicates increasing optimism after the significant drop seen in the spring of 2022, which was connected to the Covid-19 lock down of Shanghai. As the autumn survey was conducted before China ended its zero-Covid strategy in December, sentiment is likely to continue to improve.

After a decline in all sub-indexes in the spring survey, there was a mixed picture in the autumn survey. The profit outlook improved from 49.6 to 53.7, while the sales outlook fell from 55.0 to 53.7. Compared with the spring survey, there is cautious optimism on order intake as fewer companies expect sales to decrease. Still, less than 50 percent of the surveyed companies reported growth in order intake. There are also indications that companies are becoming more cautious about investments, and the mood appears to be shifting to a “wait and see” approach.

Although the overall index improved, the trend is still consistent with what was seen in the spring survey and sentiment remains subdued given that a fair amount of uncertainty remains.

“However, with the zero-Covid strategy having recently been scrapped and the Chinese government having adopted a clear pro-growth attitude for 2023, we have already observed a shift in sentiment among foreign companies in China,” said Juliette Xue Lascoux, General Manager of SEB Shanghai. “What’s more, many major cities in China have already gone through the first infection waves that were expected to come after the zero-Covid strategy was abandoned. That means Covid-related disruptions are likely to decrease and that optimism is likely to continue to increase.”

Supply-chain disruptions was the main concern among the survey respondents in the spring, with some 70 percent citing that as the main concern then. While it remains a major concern, the share of respondents citing that as their biggest concern in the autumn has dropped to 24 percent. The survey also shows that concerns about data protection and cyber security are increasing as new regulation is underway, with concerns about regulatory inspection jumping from 5 percent in the spring to 32 percent in the autumn.

For further information, contact:
Juliette Xue Lascoux, General Manager of SEB Shanghai
+86 21 2052 1818

Press contact:
Niklas Magnusson, Head of Media Relations & External Communication
+46 70 763 8243

SEB is a leading northern European financial services group with international reach. We exist to positively shape the future with responsible advice and capital, today and for generations to come. By partnering with our customers, we want to be a leading catalyst in the transition to a more sustainable world. In Sweden and the Baltic countries, SEB offers financial advice and a wide range of financial services. In Denmark, Finland, Norway, Germany and the United Kingdom, we have a strong focus on corporate and investment banking based on a full-service offering to corporate and institutional clients. The international nature of SEB's business is reflected in our presence in more than 20 countries worldwide, with around 16,500 employees. At 31 December 2022, the Group's total assets amounted to SEK 3,533bn while assets under management totalled SEK 2,123bn. Read more about SEB at sebgroup.com.