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China is 'the jewel in the crown' of SAP, CEO says

Key Points
  • Goldman Sachs warned Friday that firms such as Broadcom, Micron Technology, Qualcomm, Qorvo, Skyworks Solutions and Wynn Resort are likely to be hit by a slowing Chinese economy.
  • Trade negotiators from the U.S. and China are gathering this week to attempt to overcome their differences and come up with an agreement by March 2.
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China is SAP’s fastest growing market, CEO says

The German software company SAP is still hopeful about the Chinese market despite other multinationals signaling slower demand from the world's second-largest economy.

Apple, Nvidia and Caterpillar have all blamed recent weak earnings on the slowing Chinese economy which registered a growth rate of 6.6 percent in 2018 — the lowest in 28 years. Economists argue that the ongoing trade war with the United States is one key factor behind the downshift.

However, SAP's CEO Bill McDermott told CNBC Tuesday that China is still "the jewel in the crown" for the company.

"We are not having challenges in China — we are doubling down in China," he said, adding that Beijing is the fastest growing market for the German firm.

Goldman Sachs warned Friday that firms such as Broadcom, Micron Technology, Qualcomm, Qorvo, Skyworks Solutions and Wynn Resort are likely to be hit by a slowing Chinese economy.

Trade negotiators from the U.S. and China are gathering this week to attempt to overcome their differences and come up with an agreement by March 2. From the start of President Donald Trump's presidential tenure, the U.S. has put tariffs on $250 billion in Chinese goods. Beijing has responded with tariffs on $110 billion worth of U.S. goods.

"You have got the number one and two economies of the world and both could benefit greatly from a deal. So I think a deal is on the horizon," McDermott predicted.