A New Compass: Navigating China’s economic transformation
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A New Compass: Navigating China’s economic transformation

China’s economic transformation is being tested by a fierce combination of external forces and domestic policies. Yet as China evolves, its capacity for innovation and its sophisticated consumer base are creating opportunities for those able to navigate the changing landscape. The 13th CIC offers insights to help investors unpack these complex dynamics.

China’s transition towards more sustainable and inclusive growth is being tested by dramatic shifts in the global economy. High energy prices, rising US interest rates and elevated geopolitical tensions are adding to the challenges caused by ongoing pandemic controls and difficulties in the real estate sector.

Yet China’s resilience, its capacity for innovation and its sophisticated consumers mean it will likely continue to weather the storm and create opportunities in the years ahead.

A steadfast commitment to decarbonization is driving greater demand for renewable energy and clean technology than in any other market. China’s household wealth is increasing quickly, supported by demographic trends. At the same time, efforts to reduce the country’s reliance on overseas technology are underpinning a multi-decade push into smarter and more advanced manufacturing.

As the economy is transformed, investors need a new compass to navigate a changed landscape. The 13th Credit Suisse China Investment Conference (CIC), taking place from October 31 to November 4, 2022, will provide expert insights into the way forward for Asia’s most dynamic and influential economy, and the next generation of investment opportunities that are emerging.

Global pressures

This year’s CIC takes place against a more complex global backdrop. The Russia-Ukraine conflict has deepened geopolitical rifts and rerouted global capital flows, forcing investors to rethink their approach. The outlook for the global economy has changed dramatically in 2022, as high energy prices take their toll and many central banks raise interest rates to combat inflation.

China’s economy is also cooling. Credit Suisse in August lowered its GDP growth forecast for 2022 to 3.5% from 4.6%, following weak industrial output data.

These changes to the macroeconomic backdrop have driven greater volatility in markets, adding to the challenges that investors face.

Global Wealth Report 2022

China's macroeconomic indicators 2021

Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook 2022

This year’s line-up of eminent speakers should help Credit Suisse clients understand what comes for China at a time of accelerated change for the global and domestic economy.

Lawrence H. Summers, Former Secretary of the Treasury of the United States; President Emeritus and Charles W. Eliot University Professor, Harvard University, will open this year’s CIC with his assessment of the US Federal Reserve’s battle against inflation, what rising US interest rates mean for the global economy, and how they will impact China.

Jun Ma, Founder and President of the Institute of Finance and Sustainability and a former member of the monetary policy committee of the People’s Bank of China, will discuss the outlook for China’s economy and the tools available to policymakers as they seek to revive the country’s growth momentum.

The geopolitical situation remains a key area of concern for investors – as it does for countries that count the two superpowers among their trading partners.

Kishore Mahbubani, Distinguished Fellow, Asia Research Institute, National University of Singapore and a former Singaporean diplomat, will offer his expert perspective on the future of US-China relations and what it means for other countries in Asia.

Zoltan Pozsar, Credit Suisse’s Global Head of Short-Term Interest Rate Strategy, will provide his views on a new order for the global monetary system, the importance of commodities in the future of global finance, and what comes next for the renminbi on the international stage.

Energy transition and green supply chains

Geopolitical shifts as a result of the conflict in Ukraine have caused global energy prices to soar, bringing energy security to the top of the global agenda.

The global focus on energy security has raised questions about the world’s commitment to climate action. For China, the ‘dual-carbon’ goals of reaching peak carbon emissions by 2030 and carbon neutrality by 2060 are major long-term policy objectives, but the country is not immune to concerns over the global energy market.

Against this backdrop, Wenjian Zhang, Assistant Secretary-General at the World Meteorological Organization, joins this year’s CIC to explain what changing weather patterns and climate change mean for China.

Shuang Wang, Deputy Director and Senior Project Manager, China Petroleum and Chemical Industry Federation, will discuss the outlook for the oil and gas industry and the impact of global energy markets on China’s transition towards net-zero emissions.

Boqiang Lin, Dean, China Institute for Studies in Energy Policy, Xiamen University, will address the new challenges facing China’s energy transition. For investors looking for opportunities to support China’s sustainable development, Tianyin Sun, Deputy Director at Tsinghua University’s Center for Green Finance Research, will outline recent steps taken to harmonize China’s fast-growing green and sustainable finance market with global standards.

As China works towards decarbonization, the country’s energy transition will create investment opportunities across the supply chain.

Auto industry expert Junyi Zhang, Lead Partner of Automotive and Manufacturing Industries and Head of the Private Capital Practice for Greater China at Oliver Wyman, will offer insights into the future of the rapidly growing market for green mobility, including the risks to further growth.

A technology-enabled future

This year’s CIC will consider the long-term drivers of China’s economy over the coming decades. Decarbonization, demographics and domestic consumption will be key factors in a growth trajectory that is increasingly dependent on advances in technology.

To assess China’s progress towards technology independence, semiconductor industry expert Erzhuang Liu, Chairman and CEO, Productive Technologies Company Limited, will share his views on the domestic market for advanced chips.

Edwin Feng, Founder and General Manager, MIR, and David Humphrey, Director of Research, Europe, ARC Advisory Group, will explain how technology is enabling more efficient and advanced manufacturing processes that will help China’s factories compete in the global market.

Technology is also reshaping China’s financial sector: China’s total household wealth rose to over US$85 trillion in 2021, and the number of Chinese US dollar millionaires is set to nearly double by 2026, according to the Credit Suisse Global Wealth Report 2022.

Jun Yang, Vice President, Tencent FinTech, will discuss how digital innovation is transforming the outlook for wealth management.

China’s capacity for innovation and its sophisticated consumer base can only become more important as the economy finds its way forward. We look forward to welcoming you to the 13th Credit Suisse China Investment Conference 2022 – and providing a new compass that will guide investors through the current cycle and towards opportunity in the decades to come.