SEB's China Financial Index: northern European ...

Both new investments and recruitment plans are up significantly but concerns
over a shortage of skilled labour, high raw material costs and competition are
reported among northern European companies operating in China. Despite the
Chinese government's measures to cool down the economy, senior managers of
northern European subsidiaries foresee a continued improvement in business
prospects in the Chinese market. Earlier optimism has been transformed into
action and more than half the companies surveyed as part of SEB's latest China
Financial Index plan further investments in the next six months with another
third planning significant investments. Nine out of 10 companies plan further
recruitments, with 20 per cent of them gearing up for a significant addition in
staff numbers.

The Chinese economy continues to outperform all other major markets growing
10.3 per cent in 2010. However, exceptionally high credit growth, record high
property prices and increasing inflation have led the Chinese government to take
measures to cool down the economy. In the last four months banks have been asked
to slow down new lending, interest rates have been raised three times and new
rules have been implemented in the property market. The view of northern
European companies, however, does not reflect the government's concerns - more
than 80 per cent have a positive or very positive view on market prospects in
the coming six months and two out of three companies anticipate increased
profits.

"We see in our own business how client flows and demand for financing is
increasing significantly right now. The need for working capital financing is up
and companies also need financing for larger investments than previously," says
Fredrik Hähnel, General Manager of SEB in Shanghai.

The survey was carried out between March 1-7, and shows that northern European
companies are more bullish in China than other companies right now.

"Although we know that our clients are expanding significantly right now, we are
actually a bit surprised by the overwhelming optimism among northern European
companies as several important indicators point to a slight slow down in
economic activity. The Purchasing Manager's index, for example, fell in February
and we know that loan growth from Chinese banks has decelerated," continues
Hähnel. "The biggest concerns, now that companies are expanding so much, are the
challenge of attracting and retaining skilled staff, higher raw material costs
and fierce competition on the Chinese market."

This is the fifth time SEB has published the twice-yearly China Financial Index.
The unique report aims to reflect expectations of northern European companies in
China to facilitate understanding of economic and financial development in the
country. The survey comprises 12 questions related to the business climate,
investment plans, recruitment plans and the view of currencies and interest
rates. The full report can be downloaded from: www.sebgroup.com.



For further information, please contact          Press contact
Fredrik Hähnel, General Manager of SEB in        Elisabeth Lennhede,  Press & PR
Shanghai                                         +46 8 763 99 16, [phone]
[phone]                               [e-mail]

                                                 Ola Kallemur, Press officer
                                                 [phone], [phone]







China Financial Index March 2011: 


http://hugin.info/1208/R/1496822/432583.pdf

Press release PDF: 


http://hugin.info/1208/R/1496822/432584.pdf




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Source: SEB via Thomson Reuters ONE

[HUG#1496822]