China Political & Business Risk Report

Policy fine-tuning

B2

MEDIUM RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

The country risk assessments are your North Star metrics to make the right decision for your business and understand the risks in international trade. We have always the best solution for your needs

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GDP USD12237.7bn (World ranking 2, World Bank 2017)
Population 1386.4mn (World ranking 1, World Bank 2017)
Form of state Communist State
Head of government Li KEQIANG
Next elections na
  • External position and fiscal position are relatively solid
  • Large domestic market
  • New growth opportunities as the country moves up the value chain and services develop
  • Improvement in macro-prudential management
  • Increasing market orientation
  • High corporate debt
  • Industrial overcapacity (steel, coal, for e.g.)
  • Strong involvement of the public sector in the economy
  • Aging population
  • Competitiveness erosion for traditional manufacturing sector
  • Continued geopolitical tensions with key countries in the region

Trade structure by destination/origin

(% of total)

Exports Rank Imports
United States 18.0%
1
10.4% Korea, Republic of
Hong Kong 14.6%
2
9.0% Japan
Japan 6.0%
3
8.6% Taiwan (PRC)
Korea, Republic of 4.4%
4
8.6% United States
Germany 3.0%
5
5.0% Germany

Trade structure by product

(% of total)

Exports Rank Imports
Electrical machinery, apparatus and appliances, n.e.s. 13%
1
20% Electrical machinery, apparatus and appliances, n.e.s.
Telecommunication and sound recording apparatus 12%
2
9% Petroleum, petroleum products and related materials
Office machines and automatic data processing machines 9%
3
9% Metalliferous ores and metal scrap
Articles of apparel & clothing accessories 8%
4
5% Professional and scientific instruments, n.e.s.
Miscellaneous manufactured articles, n.e.s. 7%
5
5% Road vehicles
As a result of the rebalancing policy in China, direct financing or bank loans are shrinking sharply and extending to more and more sectors. Consequently, DSO remains high and late payments are not efficiently regulated.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings


The court system is complex and suffers from a lack of transparency, delays and high costs. As enforcement results are poor, amicable or non-litigation collection is the preferred option.

The insolvency framework is complex, with liquidation as the default procedure.​

Contact Euler Hermes

Economic Research Team

research@eulerhermes.com

Contact Mahamoud Islam

Economic Research Team

mahamoud.islam@eulerhermes.com

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