Business leaders bearish on global economy, rank hard landing in China as biggest risk

HONG KONG – Participants in this year’s Asian Financial Forum in Hong Kong are bearish on prospects for the global economy in 2016, with a hard landing in China seen as the biggest risk. Real-time surveys held during AFF sessions on Monday and Tuesday of this week showed only 15.8% of participants optimistic about the global economic outlook, with 43.7% pessimistic, and 40.5% expressing a neutral view.

When asked about the biggest risk to the global economy this year, 36.3% cited the potential for a hard landing of the Chinese mainland economy, followed by geopolitical tensions (21.8%), collapse of energy and commodity prices (20.4%), and uncertainty about the pace of US interest rate normalisation (17.9%).

When asked about markets offering the best investment returns, China ranked first with 30.3% of the votes followed by the US (23.4%), Southeast Asia (17.5%) and India (12.7%).

In terms of industrial sectors with the greatest potential to drive global growth, 23.4% of respondents picked green industries/environmental goods and services, followed by telecom, media and technology (20.1%), E-commerce (20.1%), and healthcare (18.7%).

Other sectors put to the vote were real estate and infrastructure (6.4%) and financial services (6.2%). Food and agriculture (4.3%) and luxury products (0.7%) were seen as having less potential to drive global growth.

More than 2,800 financial experts, CEOs, professional investors and high net-worth individuals from 38 countries and regions attended the Frum, organised by the Hong Kong SAR Government and the Hong Kong Trade Development Council (ATI).