Today the world’s leading chief financial officers have a more positive outlook for economy of China than they do for the economy of the United States. The Q3 CNBC Global CFO Council Survey revealed on Friday. That is the first time in the survey’s history that this elite corps of executives were more upbeat on China.
In the latest survey, CFOs gave an average outlook of “Stable” for China’s GDP, while seeing the U.S. economy as “Modestly Declining.” Around the world, GDP outlook was generally improved from the second quarter survey, when no region was seen as stable.
This quarter, along with China, the council upgraded the rest of Asia and the Eurozone from “Modestly Declining” to “Stable.” Latin America went from “Strongly Declining” to “Modestly Declining”. But the U.S. economy was seen as “modestly declining” for the second straight quarter.
The outlook echoes reports that China’s economy is rebounding as life there starts to look more and more like it did before the pandemic. In July, China said its economy grew 3.2% in the second quarter. The U.S. economy decreased at an annualized rate of 32.9% in the same quarter, the worst single-quarter decline in history.
China’s bounceback comes as the country deals with the double-whammy of the pandemic and heightened tensions with the United States over trade, technology and geopolitics. It has been spurred by ramped up government stimulus to combat the coronavirus-led downturn.
The International Monetary Fund has forecast China real GDP to expand 1.0% for the full year, the only major economy expected to report growth in 2020. In contrast, it forecasts that real GDP will be -8% in the U.S. during the same period.
CFOs also struck a cautious tone about the stock market. Despite a rapid recovery for stocks from the market’s bottoming out in April, the council is split on where the market is headed next. Statistics tell the story.
According to the survey, 42.5% say the Dow Jones Industrial Average will fall back below 25,000 before it reaches 30,000 for the first time. Nearly one-third of executives (27.5%), think the record high will come before another downturn for the Dow.