The boss of one of the world’s largest accountancy firms thinks China is “a lot more bullish” than press reports make it out to be and he sees it as a major growth area for 2017.
KPMG global chairman John Veihmeyer told Business Insider in an interview that China, along with a number of other emerging markets, is seeing a flow of outbound investment from the region despite reports of an economic slowdown.
“China is a lot more bullish than press reports make it out to be. We have spent a lot of time there and I think we are seeing continued appetite outbound and this will continue to have an impact. We are seeing significant interest in a series of roadshows in a number of different countries, including China,” said Veihmeyer to BI.
According to the latest data from China’s National Bureau of Statistics (NBS), the economy grew by 6.7% year-on-year in the September quarter, a figure that was in line with expectations. In seasonally adjusted terms, the economy grew by 1.8% during the quarter, again in line with expectations. The June quarter growth rate, previously reported at 1.8%, was revised up to 1.9%.
Economists note that China’s government investment has played a crucial role in helping to stabilise the economy.
Subsequently, China’s debt to GDP ratio keeps rising and while borrowing has helped fuel growth in China — it’s starting to lose its effectiveness. Analysts at Morgan Stanley said in a note to clients that China’s debt to GDP rose to 276% in the third quarter this year from 249% in 2015.
However, Veihmeyer told us that his clients — which include some of the largest companies in the world across all sectors — are more optimistic this year than last year and that KPMG’s on-ground experience with China gives the group greater confidence in how China will perform.
“On balance there is slow growth [across the world] that we’ve been dealing with, not just economically, but geopolitically and socially, but I am generally optimistic for the global economy and at KPMG we see where the opportunities exist to grow effectively,” said Veihmeyer.
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