Mahamoud Islam +852.3665.8989.

Ludovic Subran +33.1.84.11.53.99

Figure 1: USD denominated global trade, China and US imports growth (3 mon-

ths moving average y/y, %)

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

13 14 15 16 17

China imports

United States imports

World Trade

Figure 2: Real GDP growth forecasts and contributions in China

-2

0

2

4

6

8

10

17 18 19 20

Changes in inventories

Exports of goods and services

Imports of goods and services

Gross fixed capital formation

Final consumption expenditure

Real GDP growth and contributions

Figure 3: Private consumption (USD bn)

0

5000

10000

15000

20000

25000

30000

35000

10 15 20 25 30 35 40

China

United States

1 President Xi’s recent political call for a more open economy echoes a gradual opening of the Chinese market for investors and exporters alike, which is confirmed by the reduction by a third YTD of the

number of protectionist measures. Note that consumer goods are often spared while harmful trade

restrictions often focus on industrial goods (chemicals, metals), according to Global Trade Alert. 2 The last 10-point bilateral trade agreement points to that direction: China agreed to open its market for

specific US corporates (beef and LNG exporters, credit card providers and rating agencies); and the US made concessions on poultry imports from China, and promised fair treatment of Chinese banks in the

US. While this secondary (the bulk of China-US trade is concentrated in Electronic and Electrical), it

sends positive signals to investors and corporates worried by a trade war between the two nations.

Figure 4: Manufacturing 2025 key sectors

China Manufacturing 2025 - top priority sectors

Next generation information technology

High-end numerical control (automation) and robotics

Aerospace

Ocean engineering and high-tech shipping

Advanced rapid transit (metro, light rail)

Energy-efficient and new energy vehicles

Electrical power equipment

Agricultural equipment

New materials

Biotechnology and high-tech medical devices

Figure 5: China’s policy uncertainty index and RMB per USD

6.0

6.2

6.4

6.6

6.8

7.0

0

100

200

300

400

500

600

700

800

12 13 14 15 16 17

Policy uncertainty Index(left axis)

RMB per USD (right)

Figure 6: China’s imports of consumer goods (2005-2015 growth average, %)

28.6

25.824.1 23.7

23.4

15.614.0

12.510.2

9.1 8.2 7.2 7.2

0

5

10

15

20

25

30

35

Cars

and

cycle

s

Be

vera

ges

Ph

arm

aceuticals

Cere

al pro

ducts

Pre

serv

ed fru

its

Clo

ckm

akin

g

Tota

l consum

er

goods

Toiletr

ies

Clo

thin

g

Optics

Manufa

ctu

red tobaccos

Dom

estic e

lectr

ical appliances

Consum

er

ele

ctr

onic

s

Figure 7: Country’s exports of consumer goods to China and expenditures on Re-search and Development (% GDP)

Japan

Switzerland

United Kingdom

Bangladesh

United States

Germany

Indonesia

Thailand

Philippines

World

New Zealand

Portugal

Sri Lanka

Malaysia

Ireland

Denmark

Australia

France

Italy

Singapore

Sweden

Viet NamPakistan

Austria

Netherlands

Spain

Cambodia, Lao PDR

Hong Kong (6.8;0.7)

Taiwan (5.1;3.1)

South Korea (4.5;4.3)

0%

1%

2%

3%

4%

5%

0% 1% 2% 3% 4% 5%

Re

se

arc

h a

nd

de

ve

lop

me

nt e

xp

en

ditu

re (

% o

f G

DP

)

Exports of consumer goods to China (in %of country's total exports)

5%//

Figure 8: China’s outward direct investment* and import growth average (2010-

2015)

Bangladesh

Cambodia

India

Indonesia

Kazakhstan

Malaysia

Kyrgyzstan

Laos

Nepal

Philippines

Myanmar

Tajikistan

Thailand

Turkmenistan

Uzbekistan

Georgia

VietnamUkraine

Mongolia

Pakistan

Sri Lanka

-20%

0%

20%

40%

60%

80%

100%

-20% 0% 20% 40% 60% 80% 100% 120%

Ch

ina

's N

et

OD

I g

row

th

China's imports growth

The Allianz Group is one of the world's leading insurers and asset managers with more than 86 million

retail and corporate customers. Allianz customers benefit from a broad range of personal and corporate

insurance services, ranging from property, life and health insurance to assistance services to credit

insurance and global business insurance. Allianz is one of the wo rld’s largest investors, managing over

650 billion euros on behalf of its insurance customers while our asset managers Allianz Global Investors

and PIMCO manage an additional 1.3 trillion euros of third-party assets. Thanks to our systematic

integration of ecological and social criteria in our business processes and investment decisions, we hold a

leading position in the Dow Jones Sustainability Index. In 2016, over 140,000 employees in more than

70 countries achieved total revenue of 122 billion euros and an operating profit of 11 billion euros for the

group.

Hermes is the global leader in trade credit insurance and a recognized specialist in the areas of

bonding, guarantees and collections. With more than 100 years of experience, the company offers

business-to-business (B2B) clients financial services to support cash and trade receivables management.

Its proprietary intelligence network tracks and analyzes daily changes in corporate solvency among small,

medium and multinational companies active in markets representing 92% of global GDP. Headquartered in

Paris, the company is present in over 50 countries with 5,800+ employees. Euler Hermes is a subsidiary of

Allianz, listed on Euronext Paris (ELE.PA) and rated AA- by Standard & Poor’s and Dagong Europe. The

company posted a consolidated turnover of €2.6 billion in 2016 and insured global business transactions

for €883 billion in exposure at the end of 2016. Further information: www.eulerhermes.com, LinkedIn or

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