As the second-largest economy and one of the fastest growing for the last decade, China continues to weigh heavily on the minds of every CEO as GDP growth continues to slow. The country is deliberately transitioning from an industrial powerhouse that consumed an enormous amount of raw materials globally to a domestically driven, service-oriented economy. Amidst this transition, GDP growth has slowed from 10.6 percent to 6.9 percent annually. China's decreased focus on infrastructure and construction has led to a rout in commodity prices that has had crippling effects on the more export-driven emerging markets.
Many nations are feeling the pain from the transitioning economy. Brazil, South Africa, Indonesia, Colombia and Chile have all experienced year-over-year declines in YPO Global Pulse readings, with Brazil registering the largest decline, at -20.42 percent. Export-heavy developed nations, like Canada and Australia — also both natural resources economies —are showing a lack of confidence in response to reduced demand for goods from China.
Despite softness in the fourth quarter, the YPO Global Pulse survey indicates that CEOs remain optimistic and expect moderate GDP growth. However, with the potential for further interest-rate increases in the U.S., additional easing measures anticipated across Asia and Europe, a slowing Chinese economy and stock and bond market volatility, CEOs may take a more conservative approach to business management in 2016.
— By Christopher Moore, chief investment officer, Morristown, New Jersey-based wealth management firm Massey Quick
CNBC and YPO (Young Presidents' Organization) have formed an exclusive editorial partnership consisting of regional "Chief Executive Networks" in the Americas, EMEA and Asia-Pacific. These Chief Executives Networks are made up of a sample of YPO's global network of 23,000 top executives from 120 countries who are on the front lines of the economy and run companies that collectively generate $6 trillion in annual revenues.