1. Market Research
  2. > Energy & Environment
  3. > Energy
  4. > Coal Energy Market Trends
  5. > China Country Risk Report Q2 2016

China Country Risk Report Q2 2016

  • March 2016
  • -
  • Business Monitor International
  • -
  • 45 pages

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. Xi Jinping has largely consolidated his leadership position, and we believe that he is firmly in control of the Communist Party. This means that policymaking 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. The level of acceptance from the government regarding the re-allocation of labour from industries with significant overcapacity issues will be particularly crucial. Major Forecast Changes The People's Bank of China (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 pressures, we are downgrading our 2016 CNY forecast to CNY7.1000/ USD, versus CNY6.8000/USD previously.

Table Of Contents

China Country Risk Report Q2 2016
Executive Summary 5
Core Views5
Major Forecast Changes5
Key Risks5
Chapter 1: Economic Outlook 7
SWOT Analysis 7
BMI Economic Risk Index 7
Economic Growth Outlook 8
On The Brink: Five Scenarios For Growth8
2016 represents a crossroads for the Chinese economy, which has lost significant momentum and remains in the midst of a serious
slowdown
GDP By Expenditure Outlook 11
TABLE: GDP GROWTH FORECASTS11
TABLE : PRIVATE CONSUMPTION FORECASTS11
TABLE: GOVERNMENT CONSUMPTION FORECASTS11
TABLE: FIXED INVESTMENT FORECASTS12
TABLE: NET EXPORTS FORECASTS12
Fiscal Policy 12
Jing-Jin-Ji Integration Set To Benefit The Region, Though Risks Remain12
The Jing-Jin-Ji integration plan, which aims to promote sustainable growth and help first tier cities climb up the value chain, will
have a positive impact on economic development in the region over the coming years Beijing, Tianjin, and Hebei will benefit from
transport integration and industry upgrading However, environmental concerns and protectionism will continue to pose risks to the
progress
Structural Fiscal Position 14
External Trade And Investment Outlook 15
Downside Risks Deepen As Imports Plummet15
Despite a surge in total social financing in January, weak trade activity and a falling producer price index point towards a continued
slowdown in China With imports continuing to plummet, we forecast China's current account surplus to expand to 28% of GDP in 2016,
versus an estimated 27% in 2015
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES 15
Outlook On External Position 17
TABLE : CAPITAL and FINANCIAL ACCOUNT BALANCE 17
TABLE: MAIN EXPORT and IMPORT PARTNERS 18
TABLE: MAIN EXPORTS and IMPORTS 18
Monetary Policy 18
RRR Cut Points Towards Further Yuan Weakness18
The PBoC's 50bps RRR cut on February 29 is in line with our expectations for the expansion of blunt monetary easing measures as the
central bank looks to support economic growth
Monetary Policy Framework 20
Chapter 2: 10-Year Forecast 21
The Chinese Economy To 2025 21
China's economic growth in the coming decade will be much slower than in the last, as the savings rate declines, the economic
liberalisation process slows and population growth falls These dynamics will result in real GDP growth averaging 56% over the next
decade, as opposed to much faster growth in the previous decade Private consumption will be a major outperformer, averaging growth
of 80% and rising in importance as a share of GDP
TABLE: LONG-TERM MACROECONOMIC FORECASTS21
Chapter 3: Political Outlook 25
SWOT Analysis 25
BMI Political Risk Index 25
Domestic Politics 26
Beijing's Effectiveness Largely Depends On Local 'Iron Triangle'26
Myriad layers of bureaucracy and the sheer size and complexity of China mean that local governments are given a significant degree
of flexibility when implementing the central government's policies Indeed, the close links between local governments, bureaucrats and
SOEs suggest that local authorities can actively thwart Beijing's will if it is deemed to be harmful to local objectives The effectiveness
of central government policy is therefore largely dependent on the interaction between these three entities at all levels of local
government
TABLE: POLITICAL OVERVIEW26
Long-Term Political Outlook 29
Major Challenges Over The Coming Decades29
China faces myriad economic, social and environmental challenges over the coming decades that could seriously test the CPC's ability
to govern The best-case scenario for any eventual political transition would entail an elite-led liberalisation of the authoritarian system,
while the worst-case scenario would involve a violent change of regime
Chapter 4: Operational Risk 33
SWOT Analysis 33
Operational Risk Index 33
Operational Risk 34
TABLE: OPERATIONAL RISK34
Trade Procedures And Governance 35
TABLE: EXPORT AND IMPORT DOCUMENTS 35
TABLE: TRADE PROCEDURES BREAKDOWN 35
TABLE : ASIA - TRADE PROCEDURES AND GOVERNANCE RISK36
Vulnerability To Crime 37
Chapter 5: BMI Global Macro Outlook 41
Global Macro Outlook 41
Tail Risks Mounting Amid Sub-Par Growth41
TABLE: GLOBAL ASSUMPTIONS41
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %42
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, 2015 AND 2016 (%) 42
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %43
TABLE: MACROECONOMIC DATA and FORECASTS 45

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Veronica

+1 718 514 2762

Purchase Reports From Reputable Market Research Publishers
Global Coal Mine Gate Cost Curve

Global Coal Mine Gate Cost Curve

  • $ 4950
  • Industry report
  • September 2016
  • by Global Data

Synopsis This report provides a breakdown of mining cash costs per tonne for individual coal operations, company production and country production. Timetric’s analysis covers 270 coal operations accounting ...

Global Metallurgical Coal Cost Curve

Global Metallurgical Coal Cost Curve

  • $ 4950
  • Industry report
  • September 2016
  • by Global Data

Synopsis This report provides a breakdown of mining cash costs per tonne for individual metallurgical coal operations, company production and country production. Timetric’s analysis covers 150 Metallurgical ...

Global Export Thermal Coal Cost Curve

Global Export Thermal Coal Cost Curve

  • $ 4950
  • Industry report
  • September 2016
  • by Global Data

Synopsis This report provides a breakdown of mining cash costs per tonne for individual export thermal coal operations, company production and country production. Timetric’s analysis covers 180 coal ...


ref:plp2016

Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.