CHINA

The leeway for policy support is declining

B2

MEDIUM RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD14318.4bn (world ranking 2, World Bank 2019)
Population 1397.3mn (world ranking 1, World Bank 2019)
Form of state Communist State
Head of state Xi Jinping
Next elections na
  • Large domestic market
  • Improvement in macro-prudential management
  • External position and fiscal position (to lesser extent) are relatively solid
  • New growth opportunities as the country moves up the global value chain, and the services sector develops
  • Increasing market orientation and opening of the domestic market
  • High corporate debt, rising household debt
  • Industrial overcapacity
  • Strong involvement of the public sector in the economy
  • Continued geopolitical tensions with key countries in the region and the U.S.
  • Competitiveness erosion for traditional manufacturing sectors
  • Aging population

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
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.​

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Economic Research Team

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Contact Françoise Huang

Economic Research Team

francoise.huang@eulerhermes.com

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