Economic recovery in Greater China

Economic recovery in Greater China.

Surveys in Hong Kong and mainland China predict a positive outlook for both economies.

Two surveys conducted in Hong Kong and mainland China reveal predictions of a quick recovery ahead for both economies. The surveys were conducted by CPA Australia, with the Hong Kong survey jointly sponsored by Deloitte China and CPA Australia’s Hong Kong China division.

Mainland China

Nearly two-thirds of respondents, made up of finance, accounting and business professionals in China, expect the mainland economy to start to recover by the fourth quarter of the year or the first half of 2010.

The survey, which took place from May to June this year, gathered the predictions of 215 professionals working in accounting, consultancy, education, financial services, insurance, legal and other sectors in China. Of those respondents, 76 per cent predicted a growth in real GDP of 6 to 7.9 per cent by the end of 2009.

Almost half the respondents agreed the Chinese economy would start to recover by the fourth quarter of 2009, while another 38 per cent of respondents predicted recovery would begin in the first half of 2010.

Central government spending was viewed by a little over half the participants (54 per cent) as being the major growth driver for real GDP.

As far as economic performance and forecasting is concerned, around 41 per cent believe that economic recovery will follow from the announcement of a 4 trillion yuan investment plan set aside for low income housing, rural infrastructure, water, electricity, transportation and the environment over the next two years.

Another 35 per cent put their faith in a consumption market stimulus package, a Chinese government initiative to increase personal spending.

A confident view of the economy was reflected in positive employment sentiment, as 61 per cent of respondents said they expect their company to employ more experienced personnel in the second half of 2009.

Respondents identified strategic business management (30 per cent) as the most important skill set to help accountants perform during the current economic downturn, followed by financial planning and communication skills.

The survey also touched on how Australia-China investment relations would be affected by the global economic environment. Nearly two-thirds of participants (64 per cent) agreed that the recent downturn would not result in a decrease of Chinese investment in the Australian market. In fact, 51 per cent of respondents forecast that China would overtake the US to become Australia’s largest source of imports in 2009.

Three-quarters of participants said that mining and energy would provide the most momentum for growth in China-Australia trade relations.

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