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

  • We expect real GDP growth to continue to slow in 2016, and forecast it to fall to 6.3%, versus 6.9% in 2015. As the economy continues to work through its significant overcapacity issues, job losses in sectors ranging from coal mining to steel production could be significant. Meanwhile, trade accounts will continue to underperform versus previous years, with both exports and imports set to contract for a second straight year.

  • Economic reforms have been ponderous over recent quarters, and signs of policy incoherence at the provincial and even central level are beginning to emerge. Should the Communist Party of China (CPC) continue to drag its feet on badly-needed SOE reforms and the curbing of overcapacity in the industrial sectors, the economy could be relegated to a multi-year stagnation that could prove difficult to escape.

Major Forecast Changes

  • The PBoC will eventually be forced to relent in its support for the embattled Chinese yuan, and we retain a bearish outlook on the currency. Amid increasing downside pressu res, we are downgrading our 2017 CNY forecast to CNY7.1000/USD, versus CNY6.9 000/USD previously. Our end-year 2016 forecast stands at CNY6.8000/USD.

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, which, in tandem with the economy's extensive debt overhang, could lead to a rapid rise in bad debts, cascading defaults, and a significant downturn in economic growth.

Macroeconomic Forecasts (China 2014-2017)
Indicator 2014e 2015e 2016f 2017f
National Sources/BMI
Nominal GDP, USDbn 10,655.0 11,341.1 11,608.0 12,192.6
Real GDP growth, % y-o-y 7.4 6.9 6.3 5.9
Consumer price inflation, % y-o-y, eop 1.5 1.6 2.0 2.5
Exchange rate CNY/USD, eop 6.21 6.49 6.80 6.90
Budget balance, % of GDP -2.0 -2.4 -3.0 -3.1
Current account balance, % of GDP 1.6 2.7 2.6 2.5
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Stalled Reforms Raise Spectre Of Multi-Year Stagnation
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
11
Stimulatory Impulse Of Higher Fiscal Deficit To Be Minimal
11
TABLE: GOVERNMENT REVENUE / EXPENDITURE GROWTH RATES
11
Structural Fiscal Position
12
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
12
External Trade And Investment Outlook
13
Outward Investment To Continue Over The Coming Quarters
13
TABLE: TEN LARGEST M&A DEALS ANNOUNCED SINCE JANUARY 2015
14
Outlook On External Position
15
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
16
TABLE: MAIN EXPORT & IMPORT PARTNERS
16
TABLE: MAIN EXPORTS & IMPORTS
16
Monetary Policy
17
Easing To Continue As PBoC Pursues MLF Strategy
17
Monetary Policy Framework
18
Currency Forecast
19
Forces Still Stacked Against Yuan
19
TABLE: BMI CURRENCY FORECAST
19
Chapter 2: 10-Year Forecast
23
The Chinese Economy To 2025
23
Structural Slowdown To Continue
23
TABLE: LONG-TERM MACROECONOMIC FORECASTS
23
Chapter 3: Political Outlook
27
SWOT Analysis
27
BMI Political Risk Index
27
Domestic Politics
28
SOEs Lagging Broader Market Reforms
28
TABLE: POLITICAL OVERVIEW
28
TABLE: FIVE-YEAR PLAN: ECONOMIC INSTITUTIONS CHAPTER
29
Long-Term Political Outlook
30
Major Challenges Over The Coming Decades
30
Chapter 4: Operational Risk
35
SWOT Analysis
35
Operational Risk Index
35
Operational Risk
36
TABLE: OPERATIONAL RISK
36
Economic Openness
37
TABLE: TOP FIVE IMPORT PRODUCTS & IMPORT PARTNERS, 2010 - 2014, USDMN
38
TABLE: FREE TRADE AGREEMENTS
39
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
40
Availability Of Labour
41
TABLE: ASIA - AVAILABILITY OF LABOUR RISK
42
TABLE: TOP 10 SOURCE COUNTRIES FOR MIGRANT WORKERS
43
TABLE: LABOUR FORCE EMPLOYMENT BY SECTOR ('000), 2007-2012
44
Chapter 5: BMI Global Macro Outlook
47
Global Macro Outlook
47
Summer Of Risk
47
TABLE: GLOBAL ASSUMPTIONS
47
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
48
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
49
Chapter 6: Appendix
51
Appendix
51
13th Five-Year Plan: Key Points
51
TABLE: TARGETS
52
TABLE: MACROECONOMIC DATA & FORECASTS
59

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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