21st CEO Survey China Report

Chinese firms seek growth through technology and trust


The forces of globalisation took a new turn in the last year. While the prevalence of digital technologies continues to blur geographic boundaries, domestic distractions made western economic giants, such as the US and the European Union (EU), increase their border control and review their global commitments. These developments, along with other aggressive strategies such as the Belt and Road Initiative, have advanced China’s influence in the global arena. However, China still lags behind the US as the most attractive market for growth prospects. It was during this transition in the world order that PwC conducted its 21st Annual CEO Survey to gauge the sentiments of executives all over the world.

The survey was built around the themes of Trade and Globalisation, Trust and Tenure, and Technology and Talent. We interviewed about 195 executives based in Mainland China and Hong Kong across a range of industries.

Watch this video to learn more about our China story and how company executives are reassessing their strategies – from trust to talent - to stay relevant in an increasingly globalised and digitised world.


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Key insights

Optimism in global and domestic growth

The world economy has been witnessing its best run and fastest growth since the recession in 2010. Domestically, China is shifting its focus from being an export and investment-led economy to one that is driven by consumer spending, innovation and services.

PwC’s 21st CEO Survey found that 69% of executives in China believe that global economic growth will improve over the next 12 months compared to 31% who had a similar outlook in the last two years. The proportion of executives in China who are “very confident” about their revenue growth prospects in the next 12 months has also risen to 38% compared to 33% in 2016.

In terms of the US and China as being attractive markets for growth, the US is rising as the top destination while China’s attractiveness for growth prospects remains stable.

Executives in China (as well as globally) believe the world is moving towards greater fragmentation, regional trading blocs and free and open access to internet. 

Diverse business concerns and strategies for growth

While business confidence is high, executives in China shared their views on a diverse range of business and political concerns.

On the business side, the top threats identified by 90% of executives in China are cyber threats, speed of technological changes, availability of key skills and changing consumer behaviour. In terms of top economic, policy, social and environmental threats to organisation’s growth prospects in China, over-regulation, geopolitical uncertainty and social instability were named.

In order to drive corporate growth/profitability in a complex business environment, 64% cited new strategic alliance or joint venture as a top strategy for the next 12 months. In terms of investment strategies, 89% are anchoring their investment strategy to initiatives like the Beijing-Tianjin-Hebei City Cluster, Belt and Road and Greater Bay Area.

It is worth noting that there has been a sizeable increase in the proportion of CEOs in China who are looking to drive corporate growth and profitability (up 19 percentage points from a year ago) through the use of outsourcing and by collaborating with entrepreneurs and start-ups (a rise of 26% from 2017 to 45% in 2018).  

Building trust as a key differentiating capability

The issue of trust is complicated by the varying degree of business pressures that CEOs in China are facing, driven by differences in stakeholder expectations. Results show that companies are recognising that driving shareholder value is no longer enough and that responsible business practices are essential as a license to operate.

About 35% of the executives surveyed in China believe that the trust between the workforce and their senior leadership is declining. 34% ‘agree’ or ‘strongly agree’ that they are experiencing declining trust from their customers.

Making a concerted effort to build and sustain trust with employees and workers is imperative. Companies are realising that trust could be a differentiating capability, no less than talent and technology. Survey results show that organisations are building trust with their workforce by creating transparency around their people strategy (62%), employee’s contribution to the overall business (58%), and diversity and inclusion and organisations’ values (57%). Promoting diversity and inclusion (54%), and investing heavily in cyber security (51%) were identified as the top two strategies in China for organisations to build trust with customers.

Skill development must keep pace with technological progress

As China shifts to an innovative, technology-driven economic growth, developing skills that keeps pace with technological progress is vital.

Given the optimistic growth prospects worldwide and in China, the survey found that 70% of executives in China expect headcount at their organisations to increase over the next 12 months. A high proportion of executives (92%) are concerned about the availability of digital skills in their industry.

In order to address the skills gap, the survey found that a higher proportion of businesses in China (84%), compared to the global average of 67%, are working towards retraining and skill development of workforce impacted by automation. Other measures such as improving compensation and benefit packages (57%) and modernising the work environment (36%) were identified as top strategies to attract digital talent.

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