KPMG Feels China’s Economy Will Do Just Fine

By Kalen Smith, Big4 Blogger

China’s economy has started to slow over the past two quarters. Many economists have grown concerned that the world’s second largest economy may start to contract over the next couple of years.

Analysts from KPMG state that the economy will see stable growth over the second half of 2012. Although Chinese firms are struggling to increase sales among their domestic customers, they have strategies in place to continue to continue to expand their global presence.

The report found that the firms are continuing to expand their global presence through mergers and acquisitions with firms in Europe and the United States. They are expanding their businesses through a variety of niches including manufacturing and mining.

The global economy has created a number of opportunities for Chinese firms. The global debt crisis has reduced the costs of capital in Europe, the United States and Canada. Although Chinese firms are buying capital in companies from developed nations all over the world, they are primarily targeting companies in North America. Most of their investments have been made in the United States.

While China is placing more emphasis in mergers and acquisitions, it isn’t accepting as much investments from foreign investors. Many investors have begun to become discouraged with a decline in China’s growth and are lucky to continue to cut back on investments until the economy starts to rebound.