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How to Invest in China Kevin Liu

How to Invest in China Kevin Liu. China Risks Overview. Key Judgment: The primary risks are political and civil unrest, caused by rising external challenges to the regime. Full-blown military conflict is unlikely unless Taiwan moves towards independence

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How to Invest in China Kevin Liu

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  1. How to Invest in China Kevin Liu

  2. China Risks Overview Key Judgment: The primary risks are political and civil unrest, caused by rising external challenges to the regime. • Full-blown military conflict is unlikely unless Taiwan moves towards independence • The threat of Uyghur separatism has declined due to effective counterterrorism measures • Widening social and economic inequality is at the root of unrest, which is greatest in the central and coastal provinces • The internal struggle for control of the Communist Party is unlikely to undermine its authority before 2012

  3. Fifth Generation of Chinese Leadership Key Judgment: The Fifth Generation of Chinese leaders will be even more pro-business than their predecessors. • The ‘Harmonious Society’ – China’s peaceful rise based on economic growth • Promote growth in the western and north-eastern provinces • Accelerate growth and competitiveness of Chinese multinationals • Ideologically conservative – hard-line policy on Taiwan and Tibet

  4. Chinese Overseas Investment Key Judgment: Chinese multinationals face problems of skills shortages and an unfavourable Western perception. • Overseas expansion of consumer brands is a growth priority • Chinese overseas investment is dominated by state-owned companies • Short of skills in brand marketing and overseas management • Persistent foreign perception of China as producer of cheap goods

  5. China’s Financial Landscape Key Judgment: Moderate resurgence of bad loans & bankruptcies in the 5-yr outlook is unlikely to cause a full-blown financial crisis. • Growing number of experienced professional managers in the financial sector • Consolidation of small and regional commercial banks • Asset management companies absorbing non-performing loans • Strong state support for Big Five banks • BUT • Likely bankruptcies in industries serving the construction & auto sectors; conflict between Beijing & local governments over fiscal policy likely to increase

  6. Power and Environmental Issues Key Judgment: China’s primary energy concerns are promoting energy efficiency and security of supply. • China will become a major market for the carbon emissions credits scheme • Opportunities in clean energy development • Tougher environmental laws will target foreign companies • Security of supply: South Asia and South Pacific

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