Multinational China execs feel chill wind, not hot growth

Wed Sep 30, 2015 3:30am EDT
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By Kazunori Takada

SHANGHAI (Reuters) - China's economy is officially growing at a brisk clip of 7 percent, but many locally based executives at multinationals say they wouldn't know it from the performance of their businesses.

By China's standards 7 percent is already the weakest annual growth in 25 years, but on the ground the slowdown in the world's second-biggest economy is being felt more acutely in many sectors, even those driven by consumer spending, which government data says is growing around 10 percent.

"How can China's economy be growing at 7 percent?" said an executive at a Western conglomerate that does business with a wide range of Chinese and foreign firms in China.

He said his business wasn't growing that fast, and those of his clients didn't appear to be, either.

Reuters spoke to 13 executives in charge of China operations at international firms, and nine said they felt they were operating in an environment where the economy was growing between 3 and 5 percent.

The nine included those from the banking, consumer goods manufacturing, advertising, heavy machinery and commercial property sectors.

One executive at a shopping mall operator said he was seeing flat sales growth compared with a year earlier, while three in the education, healthcare and e-commerce industries said revenues were still growing in double-digits.

"It's very possible that GDP is getting boosted by factors we don't see, such as government spending on infrastructure," said an executive at a Japanese clothing wholesaler.   Continued...

A worker polishes steel coils at a factory in Dalian, Liaoning province, China, in this September 1, 2015 file picture.  REUTERS/China Daily/Files