China's slowdown has been the headline economic story, but the latest business survey in Asia suggests executives are betting on Chinese improvement, even as banks worry about the its efforts to slim down bloated industries. Joel Flynn reports.
It's been a year to forget for China so far, but at least for now many seem to think the worst is over. Sentiment at some of the largest businesses in Asia brightened in the first quarter of 2016. Up from four year lows the previous quarter, executives are betting on Chinese improvement. Elsewhere in the region too are more causes for optimism. SOUNDBITE: World First Chief Economist Jeremy Cook, saying (English): "I think a lot of people moved into Q1 of this year expecting that the commodity price falls and the weakness that that held over the Chinese economy, for example, over the Malaysian economy, over the Thai economy, moving through 2016 was likely to dissipate." The Philippines was considered the most optimistic in the region, but it's China that nearly all those surveyed said was key. The country's big problem is trying to move its economy away from industry to one driven by the service sector. 1.5 trillion dollars of debts at coal, steel and cement makers are now threatening to overwhelm the country's banks. Critics say there's no clear way for these to be handled. Cities too are beginning to worry some. SOUNDBITE: World First Chief Economist Jeremy Cook, saying (English): "It's more so the debt around the housing market we have to be worried about, one has to think, and certainly the bubble-like tendencies we're seeing in Chinese residential and metropolitan area housing stocks moving through 2016." Demand from China is still the biggest risk to Asia, the survey said. It is, after all, the world's largest commodities consumer. With oil prices also still on the ropes as well, business managers in and outside China will be holding off on popping their champagne corks just yet.