China Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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China Country Risk Report
Product Price
$1,195.00

Core Views

  • Reports that the IMF will vote to include the CNY in its special drawing rights (SDR) basket by the end of November reflect a notable success for the embattled PBoC, as well as a symbolic milestone in China's rise to global economic prominence. However, we do not believe that the move will provide significant support for the CNY over the medium-term, and retain our forecast for the currency to average CNY6.68/USD in 2016.

  • Xi Jinping has largely consolidated his leadership position, and we believe that he is firmly in control of the Communist Party. This means that policy-making will remain highly centralised and generally cohesive over the medium term. While there remain divides on how to manage the economy, we believe that an increased emphasis will be placed on monetary stimulus as growth continues to slow. That said, targeted fiscal measures are also likely as the pace of the slowdown has likely surprised Beijing to the downside, and growth-negative reforms will be increasingly difficult to implement.

Major Forecast Changes

  • High frequency macroeconomic indicators including rail freight volumes, import growth, purchasing managers' indices, and steel exports (among others) paint the picture of a rapidly cooling economy, and we continue to believe that headline GDP figures do not encapsulate this trend. However, given the fact that the Chinese government is likely to announce a 6.5% annual real GDP growth target for the next five years, we note that it is unlikely to print a figure significantly below this rate for 2016. As such, we have upgraded our 2016 real GDP forecast to 6.3%.

Key Risks

  • The PBoC's continued support of the Chinese yuan is contrary to its monetary easing operations aimed at shoring up economic activity, and we expect the central bank to relent on the former. However, there exists the possibility that monetary conditions become more acute over the course of 2016, which could lead to a rapid rise in bad debts, cascading defaults, and a significant downturn in economic growth.

Macroeconomic Forecasts (China 2013-2016)
Indicator 2013 2014e 2015f 2016f
National Sources/BMI
Real GDP growth, % y-o-y 7.7 7.4 6.7 6.3
Nominal GDP, USDbn 9,502.2 10,382.9 10,837.8 11,171.0
Consumer price inflation, % y-o-y, eop 2.5 1.5 1.0 2.0
Exchange rate CNY/USD, eop 6.05 6.21 6.55 6.80
Budget balance, % of GDP -1.9 -2.1 -2.5 -2.4
Current account balance, % of GDP 1.9 1.6 2.7 2.7
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Foreign Policy
8
China's Expanding Military Reach 'Inevitable', But Gradual
8
Table: Political Overview
8
Table: POSSIBLE FUTURE CHINESE BASES
9
Long-Term Political Outlook
11
Major Challenges Over The Coming Decades
11
Chapter 2: Economic Outlook
15
SWOT Analysis
15
BMI Economic Risk Index
15
Economic Activity
16
Headline Growth Beat Offers Little Cause For Cheer
16
Table: Economic Activity
16
Monetary Policy
17
More Easing To Come As PBoC Scrambles To Support Growth
17
Table: Monetary Policy
17
Fiscal Policy
18
Two Steps Forward, One Step Back For Fiscal Reforms
18
Table: Fiscal Policy
19
Balance Of Payments
20
Current Account Surge Belies Weak Economic Fundamentals
20
Table: Current Account
21
Table: MAIN EXPORT & IMPORT PARTNERS
22
Table: MAIN EXPORTS & IMPORTS
22
Chapter 3: 10-Year Forecast
23
The Chinese Economy To 2024
23
Further Slowdown As Economy Rebalances
23
Table: Long-Term Macroeconomic Forecasts
23
Chapter 4: Operational Risk
27
SWOT Analysis
27
Operational Risk Index
27
Operational Risk
28
Table: Operational Risk
28
Market Size And Utilities
29
table: Market Size & Utilities
30
International Security Risk
34
Table: Interstate Security Risk
34
Chapter 5: Key Sectors
39
Pharmaceuticals & Healthcare
39
Table: Pharmaceutical Sales, Historical Data & Forecasts
40
Table: Healthcare Expenditure Trends, Historical Data & Forecasts
41
Telecommunications
42
Table: Telecoms Sector - Historical Data & Forecasts
43
Other Key Sectors
47
Table: Oil & Gas Sector Key Indicators
47
Table: Defence & Security Sector Key Indicators
47
Table: Infrastructure Sector Key Indicators
47
Table: Food & Drink Sector Key Indicators
48
Table: Autos Sector Key Indicators
48
Table: Freight Key Indicators
48
Chapter 6: BMI Global Macro Outlook
49
Global Macro Outlook
49
China Crisis To Have Far-Reaching Impact
49
Table: Global Assumptions
49
Table: Developed States, Real GDP GrowtH, %
50
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
50
Table: Emerging Markets, Real GDP Growth, %
51

Assess your risk exposure in China with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in China with confidence.

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