For the first time ever, chief financial officers (CFOs) in some of the world's largest firms say their outlook for China's economy is more positive than that of the United States.
The upbeat view of China's growth this year and into the next was revealed by the Q2 CNBC Global CFO Council Survey published by American business TV network, CNBC. In the survey, CFOs gave China's economy an average outlook of "Stable" compared to the U.S. economy, which they rated as "Modestly Declining."
Their optimism comes on the back of more positive economic news and perceptions about China and its economy, the world's second largest after the U.S. China is on the road to economic recovery from COVID-19 while the U.S. is nowhere near to this outcome.
China declared its COVID-19 pandemic under control in May. On the other hand, the U.S. still leads the world in the number of total COVID-19 cases and deaths.
As of Saturday, the U.S. had 6.1 million cases out of the world total of 25.2 million cases, and 186,000 deaths out of the global total of 846,000. In contrast, China has 85,000 total cases and 4,600 deaths. China is ranked by Worldometers as the country with the 35th highest number of confirmed COVID-19 cases.
China's economy is on the rebound and grew 3.2% in Q2. On the other hand, the U.S. economy plummeted an astounding 32.9% in Q2, the worst single-quarter decline in U.S. history.
The International Monetary Fund (IMF) forecasts China real GDP to expand 1.0% for the full year 2020. It said China will be the only major economy expected to report growth in 2020. In contrast, real GDP in the U.S. will plummet to -8% in the U.S. for the entire year.
CFOs now hold a more positive view of the global economy compared to their more pessimistic outlook in March when they ranked no region as stable. They rated Asia (including China) and the Eurozone as "Stable" from "Modestly Declining." Latin America fell from "Strongly Declining" to "Modestly Declining."
CFOs again rated the beleaguered U.S. economy as "Modestly Declining."
The survey said the grim outlook for the U.S. economy this year reflects the relentless uncertainties among large companies being savaged by the pandemic.
Twenty-five of the 40 CFOs who responded to the survey called the pandemic the biggest external risk facing their companies. Fully 80% said the pandemic will have a negative or very negative impact on their company this year. In contrast, only one CFO said the pandemic will be positive for his company.