China continuing to outpace US economy: Economists
China continues to outpace the US economy for the second straight quarter amid the coronavirus pandemic that has taken a heavy toll on the United States, a new survey reveals.
The world’s leading chief financial officers (CFO), in the Q4 CNBC Global CFO Council Survey, gave an average outlook of “Modestly Improving” for China’s GDP, upgrading the Asian country from its third quarter rating of “Stable”.
Although the council’s outlook for the American economy also improved from “Modestly Declining” in Q3 to “Stable” in the current quarter, the country still trails China.
GDP outlook was overall improved from the second and third quarter surveys globally.
Along with the US, the council upgraded Canada and the UK from “Modestly Declining” to “Stable” in this quarter, while other Asian countries as well as the Eurozone maintained their “stable” rating from the previous quarter.
Africa, the Middle East, Latin America and Russia are still regarded as “modestly declining,” the survey shows.
The CNBC Global CFO Council, which represents some of the largest public and private companies around the globe, collectively manages over $5 trillion in market value across a wide variety of sectors.
The council’s new assessment of China indicates that its economy is rebounding as life appears to be going back to normal like it was pre-pandemic.
In October, China reported its economy developed 4.9% in the third quarter, after growing 3.2% in the second quarter, although the third quarter number was under consensus estimates.
In the US, the economy grew 33.1% in the third quarter as it rebounded from the sharpest quarterly decline since the government started to keep records.
Although the US economy is expected to grow 5% in the fourth quarter, the spikes in Covid-19 cases there in November poses a major obstacle for the economy to reach that number with major Wall Street banks downgrading the American GDP outlook in recent weeks.
CFOs view the pandemic the biggest external challenge facing their business, with 28 (65.1%) of the 43 CFOs who participated in this quarter’s survey citing the crisis the biggest external risk their companies are confronted with.
In their prediction for 2021, a majority are basing their plans on the hope of a vaccine and an end to the pandemic globally.
Sixty-five percent believe the promise of a Covid-19 vaccine by Q2 of next year is greatly impacting on their plans for 2021, while almost 21% say the current surge in the cases is having the greatest effect on next year’s plans.
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