Banca March | China has launched the third phase of the “Big Fund”, amounting to 344 billion yuan ($47.5 billion) dedicated to the development of semiconductors. This phase brings together the largest amount of the three phases: the first phase of 138.7 billion yuan in 2014 and the second phase of 204 billion yuan in 2019. The aim of this fund is to build an independent supply chain, after years…
Alicia García Herrero (Natixis) | China has become one of the most important luxury consumption markets for foreign brands, but economic headwinds may cloud the outlook. With rising purchasing power and appetite in luxury spending, Chinese consumers have become more relevant globally. This report addresses what to expect in China’s luxury segment amid structural economic deceleration and geopolitical tensions. Introducing Natixis China Luxury Consumption Index We aim to analyze the…
Alicia García Herrero (Natixis) | President Xi Jinping’s European tour, his first in five years, has shown how much EU member states, at least those in the core of Europe, need a reality check. Not only has Xi taken quite some time to visit the continent but in doing so he chose to visit his staunchest European allies, Serbia and Hungary, beyond France. President Emmanuel Macron was an important target…
Norbolsa | French President Emmanuel Macron and European Commission chief Ursula von der Leyen on Monday urged Chinese President Xi Jinping to ensure more balanced trade with Europe, but the Chinese leader showed little sign of being willing to offer major concessions. In his meetings in Paris, Macron also pressed the Chinese leader to use his influence over Russia to end the war in Ukraine. Xi was arriving in Europe…
Global economyCapital Group| It seems that foreign investment patterns have yet to show a decisive successor to China. Globally, foreign direct investment (FDI) as a percentage of GDP peaked around the time of the financial crisis: investment in China stagnated slightly earlier, in the early 2000s, just after its accession to the World Trade Organisation and following rapid inflows into the manufacturing sector. In absolute terms, however, the United States…
Alicia García Herrero (Natixis) | China’s banking sector technically opened up to full foreign competition in late 2019, as an aftermath of the Trump-Xi meeting in Beijing in 2017. The formal announcement has hardly changed the situation of foreign banks operating in China, which have a small and decreasing market share as well as lower profitability than domestic peers. Lower foreign participation than peers Despite the further opening, the share…
Alicia García Herrero (Natixis) | The years of China’s high growth are past, as the world learned painfully in 2023. Notwithstanding the enormous tailwinds stemming from having exited Zero-Covid policies during 2022, the Chinese economy barely reached the underwhelming 5% GDP growth target cautiously set by Premier Li Qiang back in March 2022. The reasons for the very slow recovery of the Chinese economy in 2023 are both cyclical and…
Alicia García Herrero (Natixis) | The Biden-Xi summit in San Francisco on 15 and 16 November 2023 might feel underwhelming for its lack of concrete announcements, especially given the long list of pending issues which had piled up since their last encounter on the sidelines of the G20 in Bali. Disappointments were equally shared by the two sides. On the Chinese side, the most pressing issue was likely the lifting…
Alicia García Herrero (Natixis) | The importance of the much-expected meeting between President Biden and President Xi in San Francisco cannot be understated, no matter the likely shallowness of the outcomes.The fact that there have only been two face-to-face since Biden took over from President Trump says it all about the importance of this encounter as the pinnacle of a series of meetings to step up dialogue between the two…
Alicia García Herrero (Natixis) | During her State of the Union address on 13 September, European Commission President Ursula von der Leyen announced that the European Union would undertake an anti-subsidy probe against the Chinese electric vehicle (EV) sector. This signalled a major step in the EU’s shift to a more aggressive trade defence against China and raises the question of how China will react, given the importance of the…