Foreign investment appetite remains but more certainty from clearer rules and regulations will help businesses invest in opportunities arising from China’s economic transition, said Dennis Nally, chairman of professional services group PriceWaterhouseCoopers International Ltd.
“When there are unclear issues out there, whether it is regulation, taxes or rule of law, businesses and investments will move to where there is more certainty,” Nally said.
“The sooner the government can provide that kind of certainty and clarity to facilitate the transition to the “New Normal”, the sooner businesses will gain the confidence to make those kinds of necessary investments,” he said.
Despite concerns over the slowdown, Nally said there is still significant global interest to invest in China because the attributes that gave rise to foreign direct investment in the last several years, such as an emerging middle class, have not changed.
That sentiment is backed up by a PwC report released earlier this year.
Although China lost its spot as CEOs’ most important overseas growth market to a resurgent US economy, the country remained second.
For PwC, China’s transition, particularly towards more outbound activities, provides a lot of optimism for the firm’s future growth.
“As companies transform themselves, they will look for our help and advice, whether it is in challenges such as international acquisitions or developing their businesses abroad, which are all opportunities for us,” said Nally.
China’s nonfinancial outward direct investment totaled $102.9 billion in 2014, up 14.1 percent from a year earlier.
Nally said that the government’s long track record of managing the economy gives a lot of people confidence that China will continue to grow at a healthy rate, which is crucial to the global economy.
The Chinese economy’s target growth of seven percent for 2015 will contribute to around one percent of total global GDP growth this year, according to PwC estimates.
Source : China Daily | March 21, 2015