Upon the eve of the 19th Communist Party Congress (CPC), Chinese President Xi Jinping declared a ‘new era’ for his country, one characterized by consumption-led growth and innovation, territorial integrity, and taking a ‘driving seat’ in helping to manage global issues such as climate change.
What does China’s ‘new era’ mean for global markets? What are the geopolitical implications? How might foreign companies and investors profit in China’s new economy?
The Chinese economy is growing and stabilizing, while Beijing amplifies its global presence in terms of outbound investment, as well as deepening financial reforms which have led to its greater inclusion in global financial markets.
Crucially, China’s external position does not mean that ‘China is taking over the world’; on the contrary, it is using existing international organizations to participate in the global system, even at a moment when the US is retrenching.
As it transitions from an investment-led to a consumption-led economy, new economy sectors – including technology, green energy, education, and tourism – continue to grow, presenting opportunities for long-term profit for companies and investors.
Cornering the globe is a publication of PwC’s Geopolitical Investing practice, and is intended to highlight key issues our clients should be considering as they think about expanding into global markets.
At the Macro level, long-term economic and demographic trends indicate an abundance of opportunities to profit and expand in emerging markets. However, the risks of doing business in these regions—such as exchange rate volatility, political uncertainty, meeting the skills gap, and shifts in tax and regulation—often hamper decision-making, forcing companies to react to events, rather than prepare for change, and capitalize on potential dislocations. By critically assessing key geopolitical issues that impact our clients, we provide insight into the ways in which companies can build capabilities to weather political and economic change in their foreign operations.
Our Geopolitical Investing team combines rigorous insight into the key macroeconomic and geopolitical issues facing business leaders today, with deep industry and sector expertise, helping companies to strategically allocate capital to grow specific business units or assets in markets around the world.