Team Finland Business Confidence Survey Reveals Cautious Optimism Among Finnish Companies in China

The latest Team Finland Business Confidence Survey, conducted between 10 and 30 April 2024, highlights a nuanced outlook among Finnish companies operating in China. The survey, which garnered 82 responses, reveals a mix of optimism and caution as businesses navigate the complex Chinese market.

Key Findings

While 57% of companies expect revenue to increase in 2024, this is a notable decrease from 81% in 2023. Additionally, 8% anticipate a significant decline in revenue, compared to 0% last year. Profit outlooks have also become more conservative, with only 53% expecting increased profits compared to 68% in 2023.

Despite short-term caution, 76% of Finnish companies remain optimistic about their business prospects in China over the next three years. However, the share of sales by Finnish companies in China has decreased since 2023, and they are selling less to local companies in China.

Investment plans are more reserved, with a slight increase in the number of companies not planning to invest in China this year (27% in 2024 vs. 19% in 2023). Nonetheless, 36% plan to maintain their current investment levels. Companies that do not plan to invest in China indicate that they will instead focus on Europe (38%), with only 14% and 17% planning to increase their investments in the USA and other parts of Asia, respectively. Shifts in investment focus include increased interest in R&D, machinery renewal, and digitalization.

Expectations for the business climate have declined, with 26% of respondents expecting it to become less favorable, up from 14% in 2023. However, 38% still foresee an improvement. Most companies plan to maintain their current workforce levels in China, with a slight increase in plans to hire foreign employees. More Finnish companies appear to increase their procurement activities in China, rather than relocating their supply chains out of China.

Key challenges identified include uneven business environments due to government policies, access to skilled labor, and increasing local competition.

Link to the Survey Results:

https://mediabank.businessfinland.fi/l/w-F5bc8B_Dp6(Link to another website.)

About the Survey:

The Team Finland Business Confidence Survey is an annual survey that gauges the sentiments and expectations of Finnish companies operating in China. It serves as a critical tool for understanding the business climate and aiding companies in strategic planning.