bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Monday 01.05.2017 | Name days: Ziedonis
LatviaLatvia

China’s dual speed economy: winners and losers

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn 2015, China’s economic growth was 6.9% – the slowest growth index in the past 25 years. Economic growth rates will remain slow in 2016 and 2017. Structural reforms that are being realized in the country to assist the development of services and consumption make China’s established dual speed economy even more pronounced, according to Coface analysts.

Winners or industries with long-term growth potential are pharmaceutical and retail trade sectors in this case. Coface’s financial analysts have given these industries low or medium risk assessment. One exception is ICT sector – this industry is part of the winners group. However, because of powerful competition, this sector is given a high risk assessment.

China’s pharmacy sector still shows stable profit. It is also one of the few sectors that is least dependent on loans. The pharmacy sector’s development is secured by constant growth of the middle class and gradual ageing of the population.

The losers or industries will growth problems are chemical and metal processing industries. These economic sectors are given a high or very high risk assessment. Companies working in those industries have the highest possibility of going bankrupt. Medium high or high risk level is given to industries that do not benefit from structural reforms. These include agriculture, paper and wood processing industries and the textile industry.

The country’s construction sector is also at risk. China’s construction and metal processing industries are at risk because of debt problems and problems caused by a large number of fictive companies. Decline in growth of China’s construction sector will continue in the second half of 2016. Demand for construction materials is also in decline in the construction sector. This especially applies to cement and steel products – the market suffers from overproduction.

«It is expected that China’s government will continue its initiated reforms, concentrating on industries with high risk potential. In spite of reforms, China’s economic growth rate in 2016 and 2017 is expected to decline. It is also possible that the number of companies with high credit risk will increase there as well. Latvian companies that cooperate with China will have to keep this in mind,» – says Coface Director in Latvia Arnis Blumfelds.

Ref: 103.109.109.5789


Leave a reply

Week in Lithuania. Vilnius to turn to court against French firm over EUR 200 million

The Vilnius City Council decided to turn to the Stockholm arbitration for compensation of damages caused by the French concern Veolia and its company Vilniaus Energija during lengthy lease of the city's heating sector after they disagreed with the claim of about 200 million euros filed by the city.

BNN summary of the week: the dark side of construction and the level of state control over gas

BNN offers a summary of this week’s topical news in a variety of categories: Change; Business; Fight; Decline; Truth and Growth.

Antane: we have to act fast to prevent our transit industry from falling behind other countries

Europe has major plans in relation to port development – it is planned to increase cargo volumes by one and a half times and create 160,000 new jobs by 2030. We have to act fast to make sure our transit industry does not fall into second speed countries group, says president of Baltic Association – Transport and Logistics Inga Antane.

Retail trade turnover up 1.5% in Latvia

Compared to March 2016, total retail trade turnover in Latvia rose by 1.5 % in March 2017. Turnover of retail trade in food products declined by 0.8 %, whereas turnover of retail trade in non-food products grew by 3.3 %.

The biggest environmental threat in Riga is pollution caused by vehicles’ exhaust gases

Looking at the main factors that create the most pollution to Latvia’s environment, 53% of Riga residents mentioned pollution caused by vehicle exhaust gases, according to results of Baltic International Bank’s Latvian barometer data.

Murniece: Kremlin's aggressive behaviour is a threat to our region

The presence of US armed forces in Baltic States is a decisive element to oppose the region’s current security threat, says Saeima speaker Inara Murniece during her meeting with US Congress House of Representatives speaker Paul Ryan.

Lithuania plans to add asphalt surfacing to 815 km of gravel roads this year

This year, Lithuania plans to add asphalt surfacing to 815 km of gravel roads. 600 km of roads will receive soft asphalt surface, and 215 km of roads will receive surface restoration.

Study: number of Baltic tourists’ trips to USA increases

In the summer season, Baltic tourists prefer to travel by air to Asia and UAE. The most popular destinations reachable by land include Italy, Spain and Germany, according to information compiled by travel agency Estravel and car rent company Budget.

Lithuanian PM: Lithuania will hush Latvia in pursuit of Chinese investments

Lithuanian Prime Minister Saulius Skvernelis must have scratched Latvia‘s ego. «In the competition for Chinese investments, Lithuania should overcome Latvia,» the head of Lithuanian Government declared after meeting Zhang Dejiang, China‘s Parliament Speaker.

Estonia allows drivers to use studded tyres in part of May

As the northern-most Baltic nation experiences cold weather, unlike normally in late April, the Estonian roads’ authority has permitted drivers to leave their studded winter tyres on until May 7.

MEP: to prevent Baltics from dying out, we need much higher growth goals

«The growth goals of Baltic States are currently too low if we want to not only avoid dying out, but also recovering the people that have left because of economic reasons,» said Lithuanian MEP Antans Guoga.

Estonian TransferWise to open office in Singapore

Estonian-managed money transfer company TransferWise has announced its plans to open a regional head office for Asia in Singapore.

Rinkevics: we have to demonstrate unity of EU member states in Brexit talks

«We have to demonstrate the unity of 27 EU member states in Brexit talks,» says Latvian Foreign Affairs Minister Edgars Rinkevics.

American company shares traded the most; Apple shares popular the most in Baltics

Shares of Apple, Amazon and Facebook were traded the most in Q1 2017, as announced by international online trading and investment company Saxo Bank. Deals with Apple shares were the most popular among Saxo Bank’s Baltic investors.

Draghi: Economic recovery in eurozone becomes more solid

Increasingly solid is the economic recovery of the euro area as it faces less risks, evaluated head of the European Central Bank, Mario Draghi. The eurozone’s governing financial institution has maintained its main interest rate on hold at zero for another month.

Crowd of protesters break into Macedonian parliament

The Assembly of Macedonia has been stormed by a violent crowd, protesting against the election of an ethnic Albanian politician as the speaker.

April in Latvia to conclude with rain; beginning of May expected to be warm

April in Latvia will conclude with rainy and cold weather, whereas the first days of May are expected to be different, as reported by Latvian Environment, Geology and Meteorology Centre.

Number of POS terminals in Latvia increased 16% in 2016

According to data of Association of Latvian Commercial Banks, compared to 2015, the number of POS terminals in Latvia increased 16% in 2016, reaching 41,613 terminals in total. On average, 494 new POS terminals are released in the country.

Citadele and Visa to create a brand new credit card in Baltics

Citadele Bank has signed a contract for long-term cooperation with global payment technology company Visa. The contract provides for close cooperation in the development of new and innovative payment cards and other payment products in all three Baltic States in the next six years.

Finance Ministry promises tax burden decline will be felt by all residents

The tax policy reform will make Latvia more competitive in comparison with other Baltic States. In addition, reforms in the country will introduce the largest PIT benefits for dependents among other Baltic States, Finance Ministry promises.

Latvia signs contract on procurement of howitzers from Austria

A mutual contract on the purchase of M109A5Oe-type self-propelled howitzer system, fire support and training platform has been signed by Latvian Defence Ministry and Austrian Defence and Sport Ministry.

Committee to evaluate education quality in Riga and reduction of classes in gymnasiums

Riga City Council intends to hold a meeting of the Education, Culture and Sports Committee. The agenda of this meeting includes Unity faction deputy Baiba Brigmane’s request to include the matter regarding Education and Science Ministry’s study performed in Riga’s secondary schools. The meeting will take place at 11:00 on Thursday, 27 April.

NATO cyber defence drill in Estonia gets bigger

Tallinn’s NATO cyber defence centre is currently holding its annual training exercise, cooperating with NATO members, partner countries and tech firms.

Lithuania: EU tends to finance electronic transports and railway, not roads

Lithuanian Road Administration believes European Union’s tends not to finance road infrastructure development and instead focus more on use of electric transports and railway infrastructure development. This is why the administration works on research of other sources of funding, says the administration’s director Egidijus Skrodenis.

KNAB commences criminal process in relation to bribe request

Latvian Corruption Prevention and Combating Bureau has commenced a criminal process in relation to possible corruptive behaviour of a state official, requesting a bribe.