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In accordance with the survey, world CFOs now have extra optimistic financial prospects for China than the US

Chinese and U.S. flags flutter near the federal government before the U.S. trade delegation meets its Chinese counterparts for talks on July 30, 2019 in Shanghai, China.

Aly Song | Reuters

Today, the world's top finance leaders have a more positive outlook for China's economy than that of the United States. The CNBC Global CFO Council's third quarter poll was released on Friday. This is the first time in the history of the poll that this elite corps of leaders is more optimistic about China.

In the latest poll, CFOs gave an average outlook of "stable" for China's GDP, while the US economy was rated as "modestly declining". Globally, the GDP outlook has generally improved since the second quarter survey, when no region was viewed as stable. During the quarter, the Council, together with China, upgraded the rest of Asia and the euro zone from "modestly declining" to "stable". Latin America went from "strongly declining" to "modestly declining". However, the US economy was rated as "slightly declining" for the second quarter in a row.

The outlook reflects that China's economy is recovering as life there looks more and more like it did before the pandemic. In July, China announced that its economy had grown 3.2% in the second quarter. The US economy contracted at an annualized rate of 32.9% for the same quarter, the worst quarterly decline in history.

China's boom comes as the country grapples with the double blow of the pandemic and heightened tensions with the United States over trade, technology and geopolitics. This was spurred by increased government incentives to combat the coronavirus-induced downturn.

What lies ahead of us for the US market

The CFOs were also cautious on the stock market. Despite a rapid rebound in stocks from the market bottom in April, advice is divided as to where the market will head next. Statistics tell the story. According to the survey, 42.5% say the Dow Jones Industrial Average will drop below 25,000 before it hits 30,000 for the first time. Almost a third of executives (27.5%) believe the record high is before another downturn for the Dow.

The bullish outlook for the US economy and markets reflects ongoing uncertainty among large companies over the Covid-19 pandemic. 25 of the 40 CFOs who responded to this quarter's survey named the pandemic as the greatest external risk to their businesses, while 80% said the pandemic will have a negative or very negative impact on their business this year. Only one CFO said the pandemic will have a positive impact on the company.

One way many companies can cope with the negative impact is through layoffs. More than half of the respondents assume that the net number of employees in their company will decrease in the next 12 months. Almost a quarter of CFOs said this a year ago. And despite the improvement in the economic situation in Asia compared to other parts of the world, CFOs in the APAC region were more likely to say that their headcount will decrease compared to their counterparts in the US.

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