Quick Take-away: China Country Risk Summary (2019 Q4)
Political Risk Index:
Fitch Solution forecasts China’s short-term and long-term political risk scores as 80.2 and 66.4. In the short-term, significant advantages show in terms of policy continuity and the policy-making process. Long-term disadvantages might reflect in the inherent nature of unelected governments, which often struggle to evolve with societal demands.
Economic Risk Index:
China’s short- and long-term economic risk ratings are 75.0 and 75.4.
Due to unwinding credit growth amid efforts by the government to rein in financial risks as well as the ongoing trade conflict with the US, China faces a difficult short-term economic outlook as real GDP growth decline. However, China’s economic outlook is still relatively brighter than many peer emerging markets due to a strong private consumption growth, and its external position remains sound.
Operational Risk Index
China scores 52.2 in trade and investment risk and 54.4 in security risk. The overall operational risk score given by Fitch Solutions is close to 56.7. This reflects the relative difficulty of doing business in China despite a fast-developing business environment, which has made significant improvements over recent years. These improvements are largely encapsulated in China’s comparatively stronger logistics risk score, which comes in at 65.8 and will continue to improve as the country’s infrastructure is developed further.
Source from: Fitch Solution