A study published by global consultancy firm Deloitte has found that financial sector bosses believe the slowdown will extend, and perhaps intensify, into 2019, threatening the government’s ability to buoy growth above 6%.
Of the 108 respondents in the survey, 82% said they have grown more pessimistic about the Chinese economy in the last six months. Over half said their business had been impacted by the tariff exchange with the US, and just 38% expect to meet their 2018 revenue targets.
“With no end in sight for tariffs, the Chinese stock markets struggling, and the prospect of pressure from government policies, it looks like [chief financial officers] are right to be negative,” said William Chou of Deloitte’s China chief financial officers programme.
Chief Asia economist at BBVA Research, Xia Le, believes business confidence is at its lowest in a decade, but Beijing is more limited in what it can do to reverse the situation this time round.
“Now, China’s policy room is significantly narrower compared to 2008,” said Xia. “The high debt level of the Chinese corporate sector and associated financial vulnerabilities have made the authorities more cautious about side effects of a massive stimulus.”