2017 - Dec 20, 2017

China Economic Report from Swiss Embassy in Beijing Now Available

The latest China Economic Report from the Swiss Embassy in Beijing is now available to download.

Key take-aways:

  • China’s economic rebalancing from export-led growth towards a services-oriented and domestic consumer demand-driven economy is well under way.
  • Improved external demand, reviving domestic consumption and rebounding manufacturing investment point to a more broad-based recovery this year.
  • Growth dropped a notch in Q3 on the back of housing and liquidity tightening as well as tougher environmental regulations prior to the 19th Party Congress but remains robust at +6.8% YoY.
  • The target growth rate of +6.5% YoY according to the 13th Five-Year Plan remains achievable and allows for deeper structural reforms in exchange for a more significant deceleration in growth.
  • The 19th Party Congress saw the addition of Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era, the BRI and supply-side structural reforms to the Party’s constitution.
  • Among others, the 19th Party Congress also saw the promotion of green development as an important basis for China’s development, with a particularly strong focus on improving air quality.
  • As repeatedly stressed during the recent Congress, the focus has increasingly shifted from quantity to quality, driven by innovation. China aims to rank amongst the world’s leading innovators by 2035.
  • Plans to reduce systemic risks including the containment local government debt have also featured large, suggesting a more determined approach towards managing lower but “higher quality” growth.
  • A step towards the opening of the financial sector shows that reforms conducive to foreign companies remain on the agenda, although detailed implementing rules have not followed the announcement.
  • Chinese foreign trade recovered sharply this year (+11.7% YoY, YTD at the end of Q3) amidst a more benign external environment and stronger internal demand.
  • Bilateral trade has increased since the FTA entered into force and continued to do so at the end of Q3, YTD (+6.4% YoY) amid both export (+8.1% YoY) and import (+3.4% YoY) growth in Switzerland.
  • Chinese ODI has continued to decrease significantly this year (-41.9% YoY, YTD at the end of Q3) due to the implementation of tighter capital control measures.
  • A recent survey revealed that the investment appetite of Swiss companies is still considerable and growing:  61% of Swiss companies (vs. 57% in 2016) plan to increase their investment in China.

Download the report