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.
- 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.