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China - lawyers hopeful, despite downturn
Economists may have been pointing over the last few days to China's worst growth figures for three years, but the analysts at one global law firm are bucking that view and remaining positive about the far eastern giant.
China: economy drifting off?
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A report released in the last week by London-based global law firm Allen & Overy maintains that China is ‘the country offering the best opportunity for growth’ in Asia.
Sharp contrast
But that view contrasts starkly with reports over the weekend focusing on growing concerns that China’s rocketing GDP may have hit a plateau – or worse. A report in The Guardian newspaper points out that China’s growth has been declining steadily since 2010.
‘An uncontrolled slump could have global repercussions,’ points out the newspaper, ‘hurting demand for oil, industrial components and consumer goods at a time when US and European growth are weak. It also might fuel political tensions in China as the ruling Communist party prepares for a sensitive, once-a-decade handover of power to younger leaders.’
Remaining hopeful
However, the A&O report – called ‘50 Degreees East-The rising power of Asia’ – remains hopeful. It maintains that some 44 per cent of business leaders surveyed by its researchers still rate China as the best opportunity for growth in Asia. It was followed by India, with Indonesia, Thailand and Myanmar also featuring.
Nonetheless, the law firm’s researchers apply some caution to their enthusiasm for China. They said the country ‘was considered the hardest market for foreign businesses to enter, although only slightly behind the US and Russia’. The report also highlighted ‘a lack of government support and restrictive practices as significant barriers to entry with the regulatory environment being the biggest hurdle’.
Sharp contrast
But that view contrasts starkly with reports over the weekend focusing on growing concerns that China’s rocketing GDP may have hit a plateau – or worse. A report in The Guardian newspaper points out that China’s growth has been declining steadily since 2010.
‘An uncontrolled slump could have global repercussions,’ points out the newspaper, ‘hurting demand for oil, industrial components and consumer goods at a time when US and European growth are weak. It also might fuel political tensions in China as the ruling Communist party prepares for a sensitive, once-a-decade handover of power to younger leaders.’
Remaining hopeful
However, the A&O report – called ‘50 Degreees East-The rising power of Asia’ – remains hopeful. It maintains that some 44 per cent of business leaders surveyed by its researchers still rate China as the best opportunity for growth in Asia. It was followed by India, with Indonesia, Thailand and Myanmar also featuring.
Nonetheless, the law firm’s researchers apply some caution to their enthusiasm for China. They said the country ‘was considered the hardest market for foreign businesses to enter, although only slightly behind the US and Russia’. The report also highlighted ‘a lack of government support and restrictive practices as significant barriers to entry with the regulatory environment being the biggest hurdle’.
