international Monetory system

http://databank.worldbank.org/data/source/world-development-indicators

https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

http://www.cs.columbia.edu/~zwb/my/cntryno.htm

6 Note: Data refers to China (Mainland) Source: CIA World Factbook 2018, World Bank World Development Indicators 2018

With 25.6 million in population, Shanghai is the largest urban area

Ethnic groups in % of populationReligious affiliation in % of population

Population in major urban areas in millions

7.1% 91.6%

1.3%

Other Zhuang Han Chinese

Land use in % of total area

18.2%

21.9%

52.1%

0.1% 0.1% 0.7% 1.8%

5.1%

22.2% 12.7%

63.4% 1.7%

Arable landForest area Permanent cropland Other

25.6

19.6

14.8 13.2 12.7 11.9

Shanghai Beijing ShenzhenGuangdongChongqing Tianjin

Overview (2/3)

Muslim

Buddhist

Folk religion

Christian

Hindu

Jewish

Other

Unaffiliated

https://www.cia.gov/library/publications/the-world-factbook/

http://databank.worldbank.org/data/source/world-development-indicators

Major airports in China (Mainland)1

Beijing Capital International Airport, Beijing

▪ Airport code: PEK

▪ Distance to city center: 30 km

Shanghai Pudong International Airport, Shanghai

▪ Airport code: PVG

▪ Distance to city center: 45 km

Guangzhou Baiyun International Airport, Guangzhou

▪ Airport code: CAN

▪ Distance to city center: 32 km

Chengdu Shuangliu International Airport, Chengdu

▪ Airport code: CTU

▪ Distance to city center: 16 km

Kunming Changshui International Airport, Kunming

▪ Airport code: KMG

▪ Distance to city center: 36 km

Overview (3/3)

Flight times from regional hubs in hours (no. of stops)2

1: Busiest airports by number of Passengers-Civil Aviation Administration of China 2: Most direct and fastest routes are considered. Flight times for 17th July 2019-Google Flights Note: Distances to city center are based on the shortest route calculated by Google Maps and rounded to full kilometers Source: Google Flights, Google Maps

China (Mainland) sports five major airports – flight time from the U.S. ca. 13-20 hours

Region Hub PEK PVG CAN CTU KMG

North America

New York City, the U.S. (JFK)

13:30 (0)

15:00 (0)

16:00 (0)

15:10 (0)

19:45 (1)

Latin America & Caribbean

São Paulo, Brazil (GRU)

23:20 (1)

25:55 (1)

24:00 (1)

28:30 (2)

28:40 (2)

Europe & Central Asia

London, the UK (LHR)

9:40 (0)

11:10 (0)

12:50 (1)

15:25 (1)

East Asia & Pacific

Hong Kong, Hong Kong (HKG)

2:50 (0)

2:05 (0)

1:00 (0)

2:25 (0)

2:40 (0)

South Asia Delhi, India (DEL)

10:00 (1)

6:10 (0)

5:05 (0)

8:35 (1)

6:05 (1)

Middle East & North Africa

Dubai, the UAE (DXB)

7:30 (0)

8:40 (0)

7:45 (0)

7:10 (0)

10:05 (1)

Sub- Saharan Africa

Johannesbu rg, South Africa (JNB)

14:05 (0)

16:40 (1)

16:00 (1)

17:40 (1)

16:25 (1)

Economy

▪ Real GDP is forecast to increase by 6% p.a. from 2018 to 2023

▪ China (Mainland) had a fiscal surplus of 0.7% of GDP in 2017

▪ Household consumption expenditure in China (Mainland) was lower than in overall East Asia & Pacific in 2017

▪ Unemployment rate was 4.7% in 2017 and has been increasing since 2010

▪ It takes 22.9 days to start a business in China (Mainland) compared to 5.6 days in the U.S.

▪ In the “labor market” area, China (Mainland) is 23.9 points behind the regional high performer

▪ With an index score of 58.1, the operational risk in China (Mainland) is relatively low

Executive summary (1/2)

Trade & Investment

▪ China (Mainland) registered a higher export trade flow than Japan in 2017

▪ With US 2125.1 billion, manufacturers accounted for 94% of the total merchandise export value in 2017

▪ China (Mainland) registered a lower export trade flow than Japan in 2017

▪ With US$38.8 billion, travel services accounted for 17% of total services export in 2017

▪ Inward FDI amounted to US$136.3 billion in 2017

Note: Data refers to China (Mainland)

China (Mainland) is an upper middle income country with a population growth of 0.4% in 2018

Society, retail & consumption

▪ Population increased by 0.4%, which is below regional average, to a total of 1,415,045,928 in 2018

▪ In global comparison, China (Mainland) has a high level of human development

▪ The retail market in China (Mainland) is well-developed

▪ With US$740,421.8m and a share of 73.6%, eCommerce generates the highest digital revenues

▪ The total FinTech transaction value is forecast to grow by 116% from 2019 to 2023

▪ 56.9% used the internet and there were 105.6 mobile cellular subscriptions per 100 people

Executive summary (2/2)

Politics

▪ China (Mainland) is a people’s democracy from a socialist perspective

▪ Rule of Law: China (Mainland) ranked #116 out of 214 countries

▪ Control of corruption is rated as strong

▪ Regulatory quality in China (Mainland) is on a middle level

▪ Moderate risks from political instability and threat of violence or terrorism

Note: Data refers to China (Mainland)

In global comparison, China (Mainland) has a high level of human development

Doing business (1/2)

▪ Meetings are scheduled in advance and reminders or change in schedule are communicated to all parties involved.

▪ Punctuality is given prime importance and meeting schedules are strictly followed.

Things you didn‘t know about the business culture in China (Mainland)

Note: Please refer to the appendix for further information on the methodology of data collection Source: Statista 2019

▪ Chinese prefer indirect communication when it comes to business discussions. Small talk while eating and drinking together to increase acquaintance as well as exchanging gifts with international business partners are considered essential.

▪ Shaking hands and maintaining eye contact are usually considered important aspects of non-verbal communication. If a potential business partner averts his glance, this is considered a sign of shyness, lack of self-confidence and general weakness. 'Shifty' eyes are perceived as a sign of secretiveness, insincerity or even falsity.

▪ Mandarin is the official language for business communication. Language interpreters are necessary to do business in the country.

▪ Hierarchy is very important in Chinese business culture and is evident mostly in state-owned enterprises.

▪ Bargaining usually depends on the type of business, however it is common during business negotiations.

▪ Business conflicts are resolved through mutual discussion, sharing opinions and arriving at a consensus that satisfies all parties involved.

▪ Hierarchy plays an important role in conflict management, as senior executives always try to resolve conflicts among lower-ranked employees.

Communication standards Business meeting procedures

Conflict management

▪ Maintaining a strong business network through personal and professional contacts is considered very important to succeed in business.

▪ The prevalence of a bureaucratic business system, especially in the public sector, makes it difficult to do business for those who don’t have the required personal connections.

Doing business (2/2)

▪ Gender inequality is prevalent, and the corporate sector is mostly dominated by men.

▪ Urbanized areas tend to pay more attention to gender equality than rural areas.

▪ Business is slower than usual during January and February. ▪ There is less focus on work-life balance in China.

Things you didn‘t know about Chinese business culture

Note: Please refer to the appendix for further information on the methodology of data collection Source: Statista 2019

Importance of business networks

Slow business months Work-life balance

Gender equality

ECONOMY

• Economic conditions

• Public finances

• Labor force

• Business environment

Real GDP1 in billion US$2

Economic conditions: real GDP (1/3)

Note: Data refers to China (Mainland) 1: See glossary for definitions 2: Constant US$, see glossary for definition of current and constant US$ 3: CAGR: Compound Annual Growth Rate/average growth rate per year Source: International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Real GDP is forecast to increase by 6% p.a. from 2018 to 2023

6,044.0 6,656.4

7,445.6 8,227.2

8,932.9 9,688.6

10,451.6 11,226.2

11,978.3 12,804.8

13,650.0 14,496.3

15,395.0 16,318.7

17,265.2 18,232.1

2015 20202008 2009 2018201320112010 2012 2014 2016 2017 2019 2021 2022 2023

+8.5%3

+6.0%3

International Monetary Fund estimate

https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

Real GDP growth, real GDP and real GDP per capita1 in US$2 in East Asia & Pacific in 2018

Economic conditions: real GDP (2/3)

1: See glossary for definitions 2: Constant US$, see glossary for definition of current and constant US$ Note: Regional average value refers to the 150 countries covered by the Statista Country Reports. North Korea excluded from the regional average due to unavailability of data Source: International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Real GDP growth at 6.6% was faster and real GDP per capita at US$9,771 was smaller than average in 2018

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000

East Asia & Pacific

Vietnam

China (Mainland)

Hong Kong (SAR) Thailand

Indonesia

Japan

Laos

Real GDP per capita in US$

Philippines

Singapore South Korea

Mongolia

Timor-Leste

Brunei Darussalam

Australia

Myanmar

Cambodia

New Zealand

Malaysia

Regional averageReal GDP growth 2017-18 in % Real GDP: US$2,500 billion

https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

Real GDP per capita1 in US$2 in 2018

Economic conditions: real GDP (3/3)

1: See glossary for definitions 2: Constant US$, see glossary for definition of current and constant US$ 3: Democratic Republic of the Congo Note: data compared only for the 150 countries from the Statista Country Reports publication series. No data available for following countries: Cuba, North Korea, Somalia and Syria Source: International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

China (Mainland) has the 55th highest real GDP per capita

# Country/region GDP

30 Slovenia 26,841

31 South Korea 26,783

32 Cyprus 25,312

33 Portugal 24,851

34 Greece 23,614

35 Czechia 23,459

36 Bahrain 23,054

37 Saudi Arabia 21,062

38 Slovakia 20,718

39 Estonia 19,717

40 Oman 17,731

41 Lithuania 17,685

42 Chile 16,688

43 Poland 16,461

44 Latvia 16,132

45 Croatia 15,846

46 Russia 15,217

47 Hungary 13,975

48 Turkey 13,816

49 Equatorial Guinea 12,049

50 Malaysia 11,767

51 Costa Rica 11,397

52 Romania 11,346

53 Mexico 10,990

54 Panama 10,362

55 China (Mainland) 9,771

56 Lebanon 9,576

57 Kazakhstan 8,772

58 Bulgaria 8,688

# Country/region GDP

59 Turkmenistan 8,561

60 Uruguay 8,328

61 Belarus 8,316

62 South Africa 7,492

63 Dominican Republic 7,336

64 Botswana 7,081

65 Serbia 6,200

66 Brazil 6,164

67 Suriname 6,048

68 Montenegro 5,896

69 Bosnia and Herzegovina 5,746

70 Argentina 5,418

71 Peru 5,326

72 Colombia 4,868

73 Jamaica 4,517

74 Indonesia 4,323

75 Macedonia 4,314

76 Mongolia 4,246

77 Ecuador 4,217

78 Iraq 4,055

79 Timor-Leste 4,023

80 Tunisia 3,989

81 Gabon 3,719

82 Belize 3,632

83 Thailand 3,589

84 Morocco 3,393

85 Egypt 3,315

86 Namibia 3,228

87 Iran 3,132

# Country/region GDP

88 Ukraine 3,086

89 Guyana 2,976

90 Armenia 2,804

91 Albania 2,731

92 Nigeria 2,422

93 Paraguay 2,416

94 Azerbaijan 2,363

95 Algeria 2,313

96 Venezuela 2,310

97 Georgia 2,191

98 India 2,185

99 Philippines 1,952

100 Bhutan 1,947

101 Guatemala 1,936

102 Vietnam 1,920

103 Libya 1,784

104 Jordan 1,748

105 Honduras 1,691

106 Ivory Coast 1,655

107 Zambia 1,634

108 Nicaragua 1,622

109 Myanmar 1,602

110 Ghana 1,562

111 El Salvador 1,504

112 Bolivia 1,354

113 Republic of the Congo 1,333

114 Sudan 1,329

115 Uzbekistan 1,291

116 Kenya 1,288

# Country/region GDP

1 Luxembourg 111,404

2 Norway 99,968

3 Qatar 82,251

4 Switzerland 79,567

5 Ireland 78,275

6 Iceland 67,038

7 Australia 64,087

8 Denmark 62,543

9 Singapore 56,354

10 Netherlands 55,380

11 United States 53,820

12 Japan 53,306

13 Sweden 51,942

14 Austria 50,150

15 Belgium 49,447

16 Finland 48,515

17 Germany 48,104

18 Canada 47,558

19 United Kingdom 45,812

20 France 44,956

21 Hong Kong (SAR) 43,986

22 Italy 35,294

23 Israel 34,841

24 United Arab Emirates 33,829

25 Spain 33,593

26 New Zealand 31,830

27 Brunei Darussalam 31,744

28 Kuwait 30,830

29 Malta 28,684

# Country/region GDP

117 Angola 1,219

118 Pakistan 1,003

119 Zimbabwe 992

120 Bangladesh 971

121 Moldova 949

122 Djibouti 887

123 Rwanda 867

124 Laos 864

125 Cambodia 847

126 Cameroon 836

127 Tanzania 834

128 Senegal 824

129 Chad 796

130 Uganda 747

131 Gambia 707

132 Kyrgyzstan 675

133 Yemen 666

134 Ethiopia 663

135 South Sudan 662

136 Mozambique 620

137 Malawi 474

138 Burkina Faso 437

139 Mali 433

140 Sierra Leone 433

141 Nepal 407

142 Afghanistan 344

143 Congo (Dem Rep)3 280

144 Tajikistan 261

145 Niger 228

Value added1 by sector in % of GDP

Economic conditions: value added by sector

Note: Data refers to China (Mainland) 1: See glossary for definitions Source: World Bank World Development Indicators 2018

Services accounted for 51.6% of GDP in 2017

70.0% 75.0%

80.0%

20.0% 15.0%

10.0%

6.0% 7.0% 8.0%

44.2% 47.8% 51.6%

46.4% 43.1%

40.5%

9.4% 9.1% 7.9%

2014

0.0%0.0% 0.0%

Other Services Industry Agriculture

2011 2017

http://databank.worldbank.org/data/source/world-development-indicators

Inflation1 and central bank interest rates2 in %

Economic conditions: inflation and interest rates

Note: Data refers to China (Mainland) 1: Percent change in annual average consumer prices 2: Monetary policy-related interest rate, percent per annum Source: International Monetary Fund, World Economic Outlook Database 2018, International Monetary Fund International Financial Statistics Database 2018

Rising interest rates while inflation is increasing from 2015 to 2016

5.9%

-0.7%

5.4%

2.6%

2.0%

1.4% 2.0%

2.2% 2.4%

2.7% 2.8% 2.9% 3.0%

2.3% 2.5% 2.5% 2.5%

2.5%

2008 20182007 2009 20122010 2011 20142013 20232015 2016 2017 2019 2020 2021 2022

2.5%2.6%

4.8%

3.3%

1.6%

2.5% 2.5%

Inflation Central bank interest rates

When interest rates are low, individuals and businesses tend to take more loans. Each bank loan increases the money supply in a fractional reserve banking system. According to the quantity theory of money, a growing money supply increases inflation. Thus, a lower interest rate tends to result in a higher inflation. High interest rates tend to lower inflation. Consumers tend to save when interest rates are higher, as returns from savings are higher. More money put aside to savings means less disposable income. This results in slower economy and decreased inflation. Forecasts for interest rates are based on latest historical value in a no-change model3. Inflation levels are estimated after 2017 by the IMF.

https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

http://data.imf.org/?sk=4C514D48-B6BA-49ED-8AB9-52B0C1A0179B

Expenses1 and revenues1 in % of GDP

Public finance: expenditure and revenue (1/2)

Note: Data refers to China (Mainland) 1: See glossary for definitions Source: World Bank World Development Indicators 2018

China (Mainland) had a fiscal surplus of 0.7% of GDP in 2017

16.2%

12.0%

16.2%

11.6% 10.9%

16.9%

2009 2013 2017

+4.1% Expense Revenue

http://databank.worldbank.org/data/source/world-development-indicators

Expenditure in % of GDP in 2017

Public finance: expenditure and revenue (2/2)

Note: Data refers to China (Mainland) 1: Expenditure by resident households and non-profit institutions serving households on individual consumption goods and services 2: Expenditure on individual consumption goods and services and collective consumption services 3: Including acquisitions less disposals of valuables 4: Value of entries into inventories less value of withdrawals and value of any recurrent losses of goods held in inventories Source: United Nations National Accounts Estimates of Main Aggregates 2018

Household consumption expenditure in China was lower than in overall East Asia & Pacific in 2017

46.3%

35.2%

OtherHousehold consumption expenditure1

19.8%

Changes in inventories4

14.3%

General government final consumption

expenditure2

Exports of goods and services

Gross capital formation3

Imports of goods and services

38.4%

15.3%

43.6%

1.7% 1.0%

28.3%

-18.0%

-26.2%

0.3% 0.1%

China East Asia & Pacific

https://unstats.un.org/unsd/snaama/introduction.asp

General government gross debt1 in % of GDP

Public finances: debt

1: See glossary for definitions 2: Statista estimate Note: Regional averages based on countries included in Statista Country Reports Source: International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Debt-to-GDP ratio in China (Mainland) expected to increase over the observed time period

34.3% 33.7% 33.6% 34.3% 37.0%

39.9% 41.1% 44.2%

47.0% 50.1%

53.9%

57.1% 60.0%

62.7% 65.1%

45.0% 45.2% 46.1% 47.6% 47.9% 48.4%

49.4% 50.3% 50.9%

54.4% 54.7% 54.8% 55.0% 55.1% 55.1%

20152009 2011 20132010 202020192012 2014 2016 2017 2018 2021 2022 2023

East Asia & PacificChina (Mainland)

International Monetary Fund estimate

https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

Net official development assistance1 received in % of gross capital formation

Public finances: development assistance received

1: See glossary for definitions Source: World Bank World Development Indicators 2018

China (Mainland) received less development aid in 2016 than in 2006

0.1% 0.1%

0.1%

0.0%

0.0% 0.0%

0.0% 0.0% 0.0%

0.0%

0.2% 0.2%

0.2%

0.1% 0.1%

0.2%

0.1% 0.1%

0.1%

2007 20132006 2008 2009 2010 2011 2012 2014 2015 2016

-114.1%

China (Mainland) East Asia & Pacific

http://databank.worldbank.org/data/source/world-development-indicators

Total labor force1 in thousand

Labor force: development

Note: Data refers to China (Mainland) 1: See glossary for definitions Source: ILO Labour force by sex and age ILO modelled estimates 2018

Total labor force to decline from 2018 to 780.7 million by 2023 compared to 2016

2017

792,808

2010 202320162011

801,469

2012 20212013 2018

351,452

2014 2015

350,693

799,857791,589

2019 2020

446,694

788,993

2022

797,645796,161 798,715 800,452 801,891 801,225 794,813 791,561 788,347 784,682 780,663

349,135

439,858

349,357

442,232

348,929

443,879

350,153

446,008

351,003

447,712

351,541

448,911

351,666

449,803

2009

450,532

349,160

450,697

347,208

450,437

344,986

449,827450,439 448,939

340,375

447,972

337,988 335,513

445,150

2008

342,622

-1.1%

MaleFemale

International Labour Organization estimate

https://www.ilo.org/ilostat/faces/wcnav_defaultSelection;ILOSTATCOOKIE=rdpUYnAUY2Xf6KbWyH9dEeGsU2DfMDImu-ll2tcUOxBtQpKD08a5!-951333532?_afrLoop=58226886601708&_afrWindowMode=0&_afrWindowId=null#!%40%40%3F_afrWindowId%3Dnull%26_afrLoop%3D58226886601708%26_afrWindowMode%3D0%26_adf.ctrl-state%3De1ucf0h9u_4

Employment in % of total labor force

Labor force: employment

Educational attainment of population over 15 in 2020

Note: Data refers to China (Mainland) 1: Generally prepares students for a direct entry into working life or for upper secondary education 2: Corresponds to the final stage of secondary education and prepares the students for a working life or tertiary education 3: Includes programs that serve to broaden the knowledge of students who have already gained an upper secondary education Source: ILO Employment by sector 2018, Wittgenstein Centre for Demography and Global Human Capital 2018

In 2020, most employees work in the services sector and have a lower secondary education

100

110

2 0

1 2

2 0

2 2

2 0

2 1

2 0

1 1

2 0

1 9

2 0

1 0

2 0

1 6

2 0

0 7

2 0

0 8

2 0

0 9

2 0

1 3

2 0

1 4

2 0

1 5

2 0

1 7

2 0

1 8

2 0

Services Industry Agriculture

5.1%

10.9%

18.8%

20.2%

45.0%

Upper secondary2

0.0% Post secondary3

No education

Incomplete primary

Primary

Lower secondary1

https://www.ilo.org/ilostat/faces/wcnav_defaultSelection?_afrLoop=58426672541615&_afrWindowMode=0&_afrWindowId=e1ucf0h9u_1#!%40%40%3F_afrWindowId%3De1ucf0h9u_1%26_afrLoop%3D58426672541615%26_afrWindowMode%3D0%26_adf.ctrl-state%3De1ucf0h9u_57

http://www.wittgensteincentre.org/en/index.htm

Unemployment1 in % of total population

Labor force: unemployment

Unemployment1 in % of total population

Note: Data refers to China (Mainland) 1: See glossary for definitions Source: World Bank World Development Indicators 2018

Unemployment rate was 4.7% in 2017 and has been increasing since 2010

4.3% 4.5% 4.5% 4.6% 4.6% 4.6% 4.7%

4.1%

20122011 20142013 2015 2016

4.2% 4.1% 4.0% 4.1% 4.0% 4.1% 4.1% 4.0%

China (Mainland) East Asia & Pacific

5.1% 5.1% 5.0%

4.0% 4.1% 4.2%

2015 2016 2017

Male Female

2010 2017

http://databank.worldbank.org/data/source/world-development-indicators

Business environment: administrative framework

1: Number of calendar days needed to complete the procedures to legally operate a business 2: Number of years from the filing for insolvency in court until the resolution of distressed assets 3: Time necessary to comply with all the procedures required to export/import goods in calendar days 4: Includes e.g. speed, simplicity, and predictability of customs clearance (5 = high efficiency, 1 = low efficiency) Source: World Bank World Development Indicators 2018

It takes 22.9 days to start a business in China (Mainland) compared to 5.6 days in the U.S.

Delivery

Time needed to resolve insolvency2

1.7 years

1.0 years

Time needed to start a business1

22.9 days

5.6 days

Time needed to register property

19.5 days

15.2 days

Time needed to fulfill tax requirements

207 hours

175 hours

Efficiency of customs clearance4

3.2

3.7

Time needed to import3

24 days

5.4 days

Time needed to export3

21 days

6 days

China (Mainland)

The U.S.

China (Mainland)

The U.S.

Business administration

http://databank.worldbank.org/data/source/world-development-indicators

Business environment: Made-In-Country Index (1/2)

Product attributes

China (Mainland) takes 49th place in the Made-In- Country-Index

Reading support: China takes 49th place with a Made-In-Country Index score of 28.

Rank Country Index

1. Germany 100

2. Switzerland 98

3. the EU 92

4. the UK 91

5. Sweden 90

6. Canada 85

7. Italy 84

8. Japan 81

8. France 81

8. the U.S. 81

… … …

49. China (Mainland) 28

Note: The Made-In-Country Index is an index for the reputation of products from various countries all over the world Source: Statista Made-In-Country Index 2017

20%

40%

60% High quality

High security

standards

Very good

value for

money

Uniqueness

Excellent

design

Advanced

technology

Authenticity

Sustainability

Fair production

Statuts symbol

Score – China Average Max

Reading support: This chart depicts respondents' answers to the question “Which attributes do you associate with products from …?”. For instance, 7% of respondents associate “high quality” with products from China.

Made-In-Country Index 2017

https://www.statista.com/page/Made-In-Country-Index

Business environment: Made-In-Country Index (2/2)

Summary

▪ “Made in China” is placed 49th in the world with an index score of 28

▪ Chinas image regarding advanced technology and value for money is extraordinarily good. In fact, China received the best scores in value for money in the entire ranking

▪ “Made in China” is ranked first by its roughly 1.3 billion inhabitants themselves. Chinese products also enjoy a good reputation in Brazil and Pakistan

▪ In most Asian countries and in Australia, Chinese products have a poor image

“Made in China” is strongest in Brazil, Pakistan and Colombia

Country Rank

China (Mainland) 1

Brazil 13

Pakistan 14

Colombia 15

the UK 19

Indonesia 21

Belgium 22

Chile 23

Israel 24

Sweden 25

Note: The Made-In-Country Index is an index for the reputation of products from various countries all over the world Source: Statista Made-In-Country Index 2017

Reading support: China is ranked highest by China itself (rank: 1). Its lowest rankings come from Japan and four other countries (rank in each country: 50).

Top 10: “Made in China” is strongest in these countries

https://www.statista.com/page/Made-In-Country-Index

Percentile rankings in Global Competitiveness 4.0 Index in 2018

Business environment: competitiveness

1: Information and communications technology Source: World Economic Forum The Global Competitiveness Index 4.0 2018

China (Mainland) takes 28th place in competitiveness

0%-20% 21%-40% 41%-60% 61%-80% 81%-100%

▪ China (Mainland) ranked 28th out of 140 countries and territories in national competitiveness

▪ Percentile rank indicates the country’s place in the ranking, with 0 corresponding to lowest rank, and 100 to highest rank

▪ The Global Competitiveness Index 4.0 includes 98 indicators of infrastructure, ICT1

adoption, macroeconomic stability, efficiency enhancers and innovation factors that determine the level of competitiveness of a country

▪ Competitiveness is a set of institutions, policies, and factors that determine the level of productivity of an economy

▪ Highly competitive economies are more productive and have higher chances of long-term prosperity than less competitive economies

http://reports.weforum.org/global-competitiveness-report-2018/

China National Petroleum Corporation registered the largest revenue

Business environment: top companies

Total revenue in million US$1 in 2018 Listing ID2CompanyRank

No. of employees in 2018

1: Current US$, see glossary for differences between current and constant US$ 2: Listing IDs refer to different stock exchanges Source: Statista Top Companies 2019

592,750

439,316

357,629

182,238

164,433

137,089

112,502

111,960

110,943

95,337

China National Petroleum Corporation

China Mobile Limited

China Petroleum and Chemical Corporation

China Railway Corporation

PetroChina Company Limited

China State Construction Engineering

China Ping An Insurance (Group) Co., Ltd.

SAIC Motors

China Railway Construction Co., Ltd.

China Life Insurance Co. Ltd.

476,223

282,256

423,543

302,827

459,152

376,900

217,511

295,862

102,817

000617

857.0

386.0

0941

601,668.0

390.0

2,318.0

600,104.0

2,628.0

1,186.0

https://www.statista.com/toplists

TRADE & INVESTMENT

▪ Merchandise trade

▪ Commercial services

▪ Investments

China (Mainland) registered a higher export trade flow than Japan in 2017

1: See glossary for definitions Note: Regional average value refers to the 150 countries covered by the Statista Country Reports Source: WTO International Trade by Commodity and Commercial Services 2018

Merchandise trade: global comparison (1/2)

Export trade flows of total merchandise1 Import trade flows of total merchandise1

100

105

110

115

120

125

130

135

140

145

150

2010 2011 20172015201420132012 2016

China (Mainland) JapanEast Asia & Pacific United States

2010 = 100%

100

105

110

115

120

125

130

135

140

145

150

20122010 2011 20142013 2015 2016 2017

2010 = 100%

Shares in merchandise trade export value in 2017

Merchandise trade: global comparison (2/2)

Shares in merchandise trade import value in 2017

Note: Regional average value refers to the 150 countries covered by the Statista Country Reports. North Korea and Timor-Leste excluded from the regional average due to unavailability of data Source: WTO International Trade by Commodity and Commercial Services 2018

The share of manufacturers in merchandise export in China is higher than in Japan in 2017

73%

Manufacturers

82%

Fuels & Mining

87%

Agricultural products

94%

8% 4%

12%

3% 2%

11%

China (Mainland) United StatesEast Asia & Pacific Japan

78%

67%

Manufacturers Fuels & Mining

24%

Agricultural products

62% 59%

20%

27%

11% 9%10%

12%

With US$2,125.1 billion, manufacturers accounted for 94% of the total merchandise export value in 2017

Note: Data refers to China (Mainland) 1: Current US$, see glossary for differences between current and constant US$ 2: CAGR: Compound Annual Growth Rate / average growth rate per year Source: WTO International Trade by Commodity and Commercial Services 2018

Merchandise trade: trade flows

Merchandise export trade flows in billion US$1 Merchandise import trade flows in billion US$1

1,476.5

1,771.9 1,924.8

2,077.1 2,205.0 2,147.0

1,973.3 2,125.1

48.1

66.2

51.6

56.1

2012

64.6

59.5

2011

49.9

70.2

59.8

2013

74.0

54.263.1

2014

72.1

2015

74.3

2016

76.0

62.1

+5.3%²

Manufacturers Agricultural productsFuels & Mining Other

894.3 1,032.9 1,058.9

1,135.6 1,179.2 1,077.7 1,030.1 1,152.2

375.0

516.2 533.8 544.3 526.6

356.2 326.2

444.8

156.8 165.5

2014

104.6

144.7

18.7 108.3

49.6

2011

68.9

2012 2013

82.7 170.7

86.0 159.6

2015

76.8 154.9

2016

65.9 180.9

+4.1%²

2010 201720102017

https://www.wto.org/english/res_e/statis_e/statis_e.htm

China (Mainland) registered a lower export trade flow than Japan in 2017

1: See glossary for definitions Note: Regional average value refers to the 150 countries covered by the Statista Country Reports. North Korea excluded from the regional average due to unavailability of data Source: WTO International Trade by Commodity and Commercial Services 2018

Commercial services: global comparison (1/2)

Export trade flows of total commercial services1 Import trade flows of total commercial services1

100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

250

201320122010 2011 2014 2015 20172016

China (Mainland) East Asia & Pacific Japan United States

2010 = 100%

100

110

120

130

140

150

160

170

180

190

200

210

220

230

240

250

2010 201420122011 2013 20162015 2017

2010 = 100%

Shares in commercial services export value in 2017

Commercial services: global comparison (2/2)

Shares in commercial services import value in 2017

Note: Regional average value refers to the 150 countries covered by the Statista Country Reports. North Korea excluded from the regional average due to unavailability of data Source: WTO International Trade by Commodity and Commercial Services 2018

The share of travel in services export is lower in China than in Japan in 2017

TravelTransportGoods-related services

11%

16%

19%

11%

17%

29%

19%

27%

China (Mainland) East Asia & Pacific Japan United States

TravelGoods-related services

10%

Transport

20%

29%

21% 20%

55%

35%

26%

With US$38.8 billion, travel services accounted for 17% of total services export in 2017

Commercial services: trade flows

45.8 48.5 50.0 51.7 44.0 45.0 44.4 38.8

34.2 35.6 38.9 37.7 38.2 38.6 33.8 37.1

26.5 25.8 24.0 23.7 24.0

72.2 89.7 85.9 93.2 114.4 110.0 106.4 126.5

201620142011 20132012 2015

23.325.2 21.4

+3.5%²

Travel Transport Goods-related services Other

54.9 72.6 102.0

128.6

227.3 249.8 261.1 254.8

63.3 80.4

85.9

94.3

96.2 85.3 80.6 93.0

74.0

93.6

92.3

106.4

107.2 96.3 105.3

114.0

1.5

0.1

0.2

2011

0.1

2012 2013 2014 2015

2.2

2016

2.5

+13.4%²

2010 201720102017

Commercial services export trade flows in billion US$1 Commercial services import trade flows in billion US$1

https://www.wto.org/english/res_e/statis_e/statis_e.htm

Top global inward FDI1 flows in billion US$2 in 2017

Investments: global comparison (1/2)

1: Foreign direct investment, see glossary for definition 2: Current US$, see glossary for differences between current and constant US$ 3: United Arab Emirates Note: Regions only include the 150 countries covered by the Statista Country Reports Source: UNCTAD Foreign Direct Investment Inward and Outward flows and stock 2018

With US$275.4 billion, the United States registered the highest inward FDI flow in 2017

275.4 24.2

58.0 49.8

41.0 34.7

136.3 104.3

62.0 46.4

39.9 2.8 2.2

62.7 29.7

14.5 19.0

10.4 7.4

3.6 3.5 3.3

United States Canada

Netherlands

Singapore

Egypt

France

India Australia

Switzerland Germany

China (Mainland) Hong Kong (SAR)

Pakistan Bangladesh

Brazil Mexico

Colombia Israel UAE3

Ethiopia Nigeria Ghana

North America

Europe & Central Asia

East Asia & Pacific

South Asia

Middle East & North Africa

Latin America & Caribbean

Sub-Saharan Africa

http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=96740

Top global outward FDI1 flows in billion US$2 in 2017

Investments: global comparison (2/2)

The United States also had the highest outward FDI sum in 2017, with US$342.3 billion

342.3 77.0

99.6 82.3

58.1 41.2

160.4 124.6

82.8 31.7

11.3 0.2

5.1 5.1 3.7

14.0 8.1 6.3 7.4

1.6 1.3

Japan

France

United States Canada

Luxembourg

South Korea

China (Mainland)

Germany United Kingdom

Hong Kong (SAR)

India Bangladesh

Pakistan Chile

Mexico Colombia

UAE3

Kuwait Israel

South Africa Angola Nigeria

0.1

North America

Europe & Central Asia

South Asia

Middle East & North Africa

Latin America & Caribbean

Sub-Saharan Africa

East Asia & Pacific

http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=96740

FDI1 inward and outward flows in billion US$2

Investments: development

Note: Data refers to China (Mainland) 1: Foreign direct investment, see glossary for definition 2: Current US$, see glossary for differences between current and constant US$ Note: FDI flows with a negative sign indicate that at least one of the three components of FDI (equity capital, reinvested earnings or intra-company loans) is negative and not offset by positive amounts of the remaining components. These are instances of reverse investment or disinvestment. Source: UNCTAD Foreign Direct Investment Inward and Outward flows and stock 2018

Inward FDI amounted to US$136.3 billion in 2017

114.7 124.0 121.1 123.9

135.6

133.7 136.3

68.8 74.7

87.8

196.1

128.5107.8

123.1

145.7

124.6

Inward flows Outward flows

2010 2017201620152014201320122011

http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=96740

FITCH SOLUTIONS RISK INDICES

▪ Methodology

▪ Development

▪ High and low performer

▪ Global and regional comparison

The risk/reward indices by Fitch Solutions are a comparative regional ranking system that classifies different markets by the ease of doing business there and operational risks and limitations that potential investors face. The operational risk index uses quantitative measures to compare the challenges of operating in 201 countries worldwide. The index attributes scores between 0-100 to each country, with 100 being the lowest risk.

The index focuses on four main risk areas:

▪ Labor market: evaluation of the risks surrounding the size, education levels and costs of employing workers in a country

▪ Logistics: evaluation of the quality and extent of the transport infrastructure, the ease of trading, and the quality and availability of utilities

▪ Trade & investment: evaluation of the openness of an economy, the level of government intervention and the quality and efficacy of the legal environment

▪ Crime & security: evaluation of operating conditions with respect to interstate conflict risk, terrorism, crime, including cybercrime and organized crime

Methodology

Note: THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings' credit ratings. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings' analysts do not share data or information with Fitch Solutions Macro Research.

Operational risk breakdown

Operation risk index

(100%)

Labor market

(25%)

Logistics

(25%)

Trade & investment

(25%)

Crime & security

(25%)

Education Transport network Economic

openness Conflict risk

Availability of labor Trade procedures

and governance Legal

Vulnerability

to crime

Labor costs Market size

and utilities

Government

intervention Business crime

Development of overall operational risk index1

Development

Development of subindices1

Note: Data refers to China (Mainland) THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings' credit ratings. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings' analysts do not share data or information with Fitch Solutions Macro Research. 1: Scale of 0-100, with 100 being the lowest risk Source: Fitch Solutions

Overall index score increased in 2019, which means that the operational risk decreased

Trade & investmentLabor market

Logistics Crime & security

56.1 56.5 56.7 58.1

2016 2017 2018 2019

55.4 55.5

53.9

65.4 65.8 66.3 66.3

51.1 50.5 52.2

54.4

20192016 20182017

52.4

54.3 53.9

57.8 54.4

Comparison of country and territory scores to highest and lowest scores1 in the region and worldwide in 2019

High and low performer

In the “labor market” area, China is 23.9 points behind the regional high performer

Global high/low

Labor market Logistics Trade & investment Crime & security

Regional high/low

77.8

40.5

Singapore

Timor-Leste

53.9China (Mainland)

79.8

19.6Timor-Leste

South Korea

66.3China (Mainland)

88.7

19.3

Hong Kong (SAR)

North Korea

57.8China (Mainland)

89.7

24.9Myanmar

Singapore

54.4China (Mainland)

79.0

25.4Sierra Leone

United States 88.6

16.9South Sudan

Netherlands 88.7

18.9

Hong Kong (SAR)

Chad

92.3

4.5

Norway

South Sudan

Operational risk index1 in 2019 and change compared to 2018

China (Mainland) had the 54th lowest operational risk in 2019 Global comparison

# Country/region Value Change

1 Singapore 82.8 →

2 Hong Kong (SAR) 81.7 →

3 Denmark 81.0 →

4 Switzerland 80.2 →

5 Netherlands 79.9 →

6 Sweden 79.2 →

7 United Kingdom 77.7 →

8 New Zealand 77.5 →

9 Canada 77.4 ↑

10 Norway 77.0 →

11 United States 76.9 →

12 Finland 75.4 →

13 Austria 74.8 →

14 Luxembourg 74.7 →

15 Ireland 74.3 →

16 Japan 74.2 →

17 Germany 73.8 →

18 Australia 73.2 →

19 Spain 72.5 →

19 France 72.5 →

21 South Korea 72.0 ↑

22 Belgium 71.6 ↓

23 Estonia 71.1 →

24 UAE 71.0 →

25 Czechia 70.9 →

25 Iceland 70.9 →

27 Portugal 70.8 →

28 Poland 69.6 →

29 Slovenia 68.6 ↑

30 Lithuania 68.4 →

# Country/region Value Change

31 Malaysia 67.9 →

32 Latvia 65.8 →

33 Malta 65.6 →

34 Italy 64.7 ↑

35 Qatar 64.6 →

36 Israel 64.4 →

37 Chile 64.3 →

38 Croatia 64.1 →

39 Hungary 64.0 →

40 Slovakia 63.3 →

41 Bahrain 63.2 →

42 Oman 62.8 →

43 Romania 62.4 →

44 Cyprus 62.3 ↑

44 Brunei Darussalam 62.3 ↑

46 Georgia 61.9 →

47 Saudi Arabia 61.7 →

48 Bulgaria 60.2 →

49 Thailand 59.4 ↑

50 Azerbaijan 58.8 ↑

51 Greece 58.6 →

51 Jordan 58.6 →

53 Kazakhstan 58.5 ↑

54 China (Mainland) 58.1 ↑

55 Serbia 57.2 →

56 Belarus 57.1 →

57 Montenegro 56.7 →

58 Russia 56.5 ↑

59 Macedonia 56.2 ↓

60 Armenia 55.5 →

# Country/region Value Change

61 Kuwait 55.1 →

62 Turkey 54.8 ↑

63 Uruguay 54.3 →

64 Vietnam 54.0 →

65 Panama 53.9 ↓

66 Costa Rica 53.2 →

67 Morocco 52.6 →

68 Indonesia 52.5 →

69 Mongolia 51.7 →

70 Mexico 51.3 →

71 South Africa 51.2 →

71 Albania 51.2 →

73 India 50.7 ↑

74 Bhutan 50.6 ↓

74 Botswana 50.6 →

76 Rwanda 49.6 ↓

77 Peru 48.8 →

78 Colombia 48.4 ↓

79 Argentina 47.8 ↑

79 Tunisia 47.8 →

81 Brazil 47.4 ↑

82 Jamaica 47.2 →

82 Namibia 47.2 ↓

84 Moldova 46.6 →

84 Bosnia and Herzeg. 46.6 ↑

86 Ukraine 46.5 ↑

87 Ecuador 45.8 →

87 Ghana 45.8 ↓

89 Egypt 45.2 →

90 Dominican Republic 44.4 →

# Country/region Value Change

91 Suriname 44.1 ↑

92 Philippines 44.0 ↑

93 Lebanon 43.9 →

94 Belize 42.7 →

94 Iran 42.7 →

96 Uzbekistan 42.3 ↑

96 Tajikistan 42.3 ↓

96 Kyrgyzstan 42.3 →

99 Cambodia 41.9 ↓

99 Cuba 41.9 →

101 Kenya 41.7 →

102 El Salvador 41.5 →

103 Algeria 41.0 →

104 Paraguay 39.7 →

105 Zambia 39.5 →

106 Nicaragua 39.1 →

107 Bangladesh 38.4 →

108 Guatemala 38.1 →

108 Turkmenistan 38.1 →

110 Gambia 37.6 →

111 Nepal 37.5 ↓

111 Ivory Coast 37.5 →

113 Laos 37.4 ↓

114 Honduras 37.3 →

115 Guyana 36.7 ↓

116 Tanzania 36.3 ↓

117 Nigeria 36.2 →

118 Senegal 36.0 ↓

118 Malawi 36.0 →

120 Uganda 35.8 →

# Country/region Value Change

121 Bolivia 35.3 →

122 Djibouti 35.2 →

123 Ethiopia 35.0 →

124 Pakistan 34.9 →

125 Burkina Faso 34.3 →

126 Mozambique 33.8 →

127 Myanmar 33.1 ↑

128 Zimbabwe 32.3 →

129 Gabon 32.1 ↓

129 North Korea 32.1 ↓

131 Angola 31.1 →

132 Venezuela 30.8 ↑

133 Iraq 30.1 →

133 Timor-Leste 30.1 →

135 Cameroon 29.6 ↓

136 Rep. of the Congo 29.3 ↓

137 Libya 29.2 →

138 Equatorial Guinea 27.8 ↓

139 Sierra Leone 27.5 ↓

140 Mali 27.4 ↓

141 Syria 27.1 →

142 Niger 26.6 →

143 Sudan 26.5 ↑

144 Haiti 25.0 →

145 Congo (Dem. Rep)2 24.5 →

145 Afghanistan 24.5 ↑

147 Yemen 23.7 →

148 Somalia 22.5 ↓

149 Chad 20.2 →

150 South Sudan 18.8 ↓

Operational risk index1 worldwide and in East Asia & Pacific in 2019

Regional comparison

In 2019, China (Mainland) ranks #54 in the Fitch operational index score out of 150 countries and territories covered by the Statista Country Reports.

With an index score of 58.1, the operational risk in China (Mainland) is relatively low

0-25 26-50 51-75 76-100

It comes #10 when compared to the other 19 countries and territories in the region East Asia & Pacific.

▪

SOCIETY

▪ Population

▪ Income

▪ Human Development Index

1,415,046 1,434,676 1,441,555 1,437,667 1,424,791 1,404,434 1,377,210

1,343,492 1,304,885

2033 203820232018 2028 20532043 2048 2058

-7.8%

Population projection1 in thousand

Population (1/4)

Note: Data refers to China (Mainland) 1: The medium fertility variant assumes that total fertility will eventually converge toward a level of 1.85 children per woman Source: United Nations, Department of Economic and Social Affairs, Population Division 2017

Population projected to reach 1,304.9 million by 2058

Population (2/4)

Note: Data refers to China (Mainland) Source: United Nations, Department of Economic and Social Affairs, Population Division 2017

0.8%

0.9%

1.4%

2.4%

2.7%

3.2%

4.2%

4.5%

3.7%

3.4%

4.4%

4.3%

3.2%

2.9%

3.1%

3.2%

Male

1.1%

0.9%

1.4%

2.4%

2.7%

3.1%

4.1%

4.3%

3.6%

3.3%

4.2%

3.9%

2.9%

2.6%

2.8%

Female

80+

75-79

70-74

65-69

60-64

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

15-19

10-14

5-9

0-4

Age group

Reading support:

Population distribution in 2018

Σ Σ

3.6% of the population is female and between the age of 40 and 44.

31.9%33.7%

65.7% of the population were between the age 20 and 64, more than half of them were men

Population growth, total population, and real GDP1 per capita in US$2 in East Asia & Pacific in 2018

Population increased by 0.4%, which is below regional average, to a total of 1,415,045,928 in 2018 Population (3/4)

1: See glossary for definitions 2: Constant US$, see glossary for definition of current and constant US$ 3: GDP per capita value of 2015 Source: United Nations, Department of Economic and Social Affairs, Population Division 2017, International Monetary Fund, World Economic Outlook Database 2018, UN Country Profile, Statista 2018

1200 90

1.0

270

2.5

1.5

-0.5

20 6030 50 1,42070 80 100

0.0

110

2.0

130

0.5

Australia

Laos

Malaysia

Hong Kong (SAR)

Mongolia

Myanmar

China (Mainland)

New Zealand

North Korea3

Philippines

Thailand

Total population in millions

Timor-Leste

Vietnam

East Asia & PacificBrunei Darussalam

Singapore

Cambodia

Indonesia

Japan

South Korea

Real GDP per capita: US$10,000Regional averagePopulation growth 2017-2018 in %

https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

http://data.un.org/en/iso/kp.html

Total population in millions in 20181

Population (4/4)

1: Countries not included in the Statista Country Reports are omitted in this table 2: Democratic Republic of the Congo Source: United Nations, Department of Economic and Social Affairs, Population Division 2017

China (Mainland) had the highest total population in the world in 2018

# Country/region Population

31 Argentina 44.7

32 Uganda 44.3

33 Ukraine 44.0

34 Algeria 42.0

35 Sudan 41.5

36 Iraq 39.3

37 Poland 38.1

38 Canada 37.0

39 Afghanistan 36.4

40 Morocco 36.2

41 Saudi Arabia 33.6

42 Peru 32.6

43 Venezuela 32.4

44 Uzbekistan 32.4

45 Malaysia 32.0

46 Angola 30.8

47 Mozambique 30.5

48 Nepal 29.6

49 Ghana 29.5

50 Yemen 28.9

52 North Korea 25.6

53 Ivory Coast 24.9

54 Australia 24.8

55 Cameroon 24.7

57 Niger 22.3

59 Burkina Faso 19.8

60 Romania 19.6

61 Malawi 19.2

62 Mali 19.1

63 Kazakhstan 18.4

# Country/region Population

64 Syria 18.3

65 Chile 18.2

66 Zambia 17.6

67 Guatemala 17.2

68 Netherlands 17.1

69 Zimbabwe 16.9

70 Ecuador 16.9

71 Senegal 16.3

72 Cambodia 16.2

73 Chad 15.4

74 Somalia 15.2

76 South Sudan 12.9

77 Rwanda 12.5

78 Tunisia 11.7

79 Belgium 11.5

80 Cuba 11.5

83 Bolivia 11.2

84 Greece 11.1

85 Haiti 11.1

86 Dominican Republic 10.9

87 Czechia 10.6

88 Portugal 10.3

89 Sweden 10.0

90 Azerbaijan 9.9

91 Jordan 9.9

92 Hungary 9.7

93 United Arab Emirates 9.5

94 Belarus 9.5

95 Honduras 9.4

96 Tajikistan 9.1

# Country/region Population

97 Serbia 8.8

98 Austria 8.8

99 Switzerland 8.5

100 Israel 8.5

103 Sierra Leone 7.7

104 Hong Kong (SAR) 7.4

105 Bulgaria 7.0

106 Laos 7.0

107 Paraguay 6.9

108 Libya 6.5

109 El Salvador 6.4

110 Nicaragua 6.3

111 Kyrgyzstan 6.1

112 Lebanon 6.1

113 Turkmenistan 5.9

114 Singapore 5.8

115 Denmark 5.8

116 Finland 5.5

117 Slovakia 5.4

118 Republic of the Congo 5.4

119 Norway 5.4

122 Costa Rica 5.0

124 Oman 4.8

125 Ireland 4.8

126 New Zealand 4.7

129 Kuwait 4.2

130 Croatia 4.2

131 Panama 4.2

132 Moldova 4.0

133 Georgia 3.9

# Country/region Population

1 China (Mainland) 1,415.0

2 India 1,354.1

3 United States 326.8

4 Indonesia 266.8

5 Brazil 210.9

6 Pakistan 200.8

7 Nigeria 195.9

8 Bangladesh 166.4

9 Russia 144.0

10 Mexico 130.8

11 Japan 127.2

12 Ethiopia 107.5

13 Philippines 106.5

14 Egypt 99.4

15 Vietnam 96.5

16 Congo (Dem Rep.)2 84.0

17 Germany 82.3

18 Iran 82.0

19 Turkey 81.9

20 Thailand 69.2

21 United Kingdom 66.6

22 France 65.2

23 Italy 59.3

24 Tanzania 59.1

25 South Africa 57.4

26 Myanmar 53.9

27 South Korea 51.2

28 Kenya 51.0

29 Colombia 49.5

30 Spain 46.4

# Country/region Population

135 Bosnia and Herzeg. 3.5

136 Uruguay 3.5

137 Mongolia 3.1

138 Albania 2.9

139 Armenia 2.9

140 Jamaica 2.9

141 Lithuania 2.9

142 Qatar 2.7

143 Namibia 2.6

144 Botswana 2.3

146 Gambia 2.2

147 Macedonia 2.1

148 Slovenia 2.1

149 Gabon 2.1

150 Latvia 1.9

152 Bahrain 1.6

155 Timor-Leste 1.3

156 Equatorial Guinea 1.3

157 Estonia 1.3

159 Cyprus 1.2

160 Djibouti 1.0

164 Bhutan 0.8

165 Guyana 0.8

167 Montenegro 0.6

169 Luxembourg 0.6

170 Suriname 0.6

175 Brunei Darussalam 0.4

176 Malta 0.4

179 Belize 0.4

180 Iceland 0.3

Disposable income growth, disposable income1 per capita in US$2 and population in East Asia & Pacific3 in 2016

Income (2/2)

1: See glossary for definitions 2: Current US$, see glossary for definition of current and constant US$ 3: Cambodia, Laos, North Korea and Vietnam excluded from the regional average due to unavailability of data 4: Estimate Source: United Nations, Department of Economic and Social Affairs, Population Division 2017, United Nations Statistics Division 2018, International Monetary Fund, World Economic Outlook Database 2018, Statista 2018

Income growth at 3.9% was faster and income per capita at US$7,640 was lower than average

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000

-10

-18

-16

Thailand

Disposable income per capita in US$

Japan

Hong Kong (SAR)

Australia

Myanmar

Brunei Darussalam

China (Mainland)4

Mongolia

New Zealand

South Korea

Singapore

Timor-Leste

Malaysia

Indonesia

East Asia & Pacific

Philippines4

Regional average Population: 250 millionDisposable income growth 2015-2016 in %

http://data.un.org/Data.aspx?q=DISPOSABLE+INCOME&d=SNA&f=group_code:103;item_code:31

https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

Human Development Index in 2017

Human Development Index

▪ With 75.2%, China (Mainland) ranks #86 in comparison of 189 countries and territories.

▪ The Human Development Index was created to emphasize that people and their capabilities should be the ultimate criteria for assessing the development of a country/territory, not economic growth alone

▪ The index is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and having a decent standard of living

Source: United Nations Development Programme Human Development Report 2018

In global comparison, China (Mainland) has a high level of human development

0%-54% 55%-69% 70%-79% 80%-100%

http://hdr.undp.org/en/2018-update

RETAIL & CONSUMPTION

▪ Consumption

▪ Consumer behavior

▪ eCommerce

▪ FinTech

Development stages of retail markets

Retail structure (1/6)

Note: Please refer to the appendix for further information on the methodology 1: See glossary for definitions Source: Statista 2019

The retail market in China (Mainland) and Hong Kong (SAR) is well-developed

▪ Global grocery chains are not present

▪ National store ownership characterized by handcart or independent stores

▪ Traditional1 payment methods are primarily used

Opening Maturing Well-developed

▪ Global grocery chains start operations in large cities1

▪ Store ownership is characterized by independent stores, national or international chains

▪ Traditional and electronic payment methods1

are commonly used

▪ Global chains operate in large cities, medium- sized cities and rural areas1

▪ Store ownership is characterized by independent stores and national or international chains

▪ Traditional, electronic and mobile payment methods1 are commonly used

International grocery chains Store location

large cities1

medium-sized and large cities1

Presence of international grocery chains

Retail structure (2/6)

1: See glossary for definitions Note: Grocery chains are sorted by number of operated stores internationally, information based on Statista Fact Check Source: World List Mania 2018, Statista 2019

In China (Mainland), global grocery chains are represented in medium-sized and large cities



International grocery chains Store location

large cities1



https://www.worldlistmania.com/10-largest-multinational-supermarkets-by-number-of-stores/

International grocery chains Store location

rural area, medium-sized and large cities1

Presence of international grocery chains

Retail structure (3/6)

1: See glossary for definitions Note: Grocery chains are sorted by number of operated stores internationally, information based on Statista Fact Check Source: World List Mania 2018, Statista 2019

In Hong Kong (SAR), global chains are represented in rural areas and in medium-sized and large cities



International grocery chains Store location



 



https://www.worldlistmania.com/10-largest-multinational-supermarkets-by-number-of-stores/

Retail structure (3/6)

1: See glossary for definitions; 2: Small moon grocery store Note: Information based on Statista Fact Check Source: Statista 2019

Characteristics of the grocery market in China (Mainland)

XXX Existence of grocery store types1

XXXX Store ownership

XXXX Payment methods

Hypermarkets Convenience Discounter Handcart

International chains National chains Independent stores2

Cash Cheques Debit card Credit card Smartphone Other

  

 

   



Retail structure (3/6)

1: See glossary for definitions Note: Information based on Statista Fact Check Source: Statista 2019

Characteristics of the grocery market in Hong Kong (SAR)

XXX Existence of grocery store types1

XXXX Store ownership

XXXX Payment methods

Hypermarkets Convenience Discounter Handcart

International chains National chains Independent stores

Cash Cheques Debit card Credit card Smartphone Other





   

 

 



59 Note: Information based on Statista Fact Check Source: Statista 2019

The grocery structure in Hong Kong (SAR) is characterized by convenience stores, discounters and handcarts.

The most popular grocery chains are “Wellcome” and “ParknShop”.

Consumers use different stores to buy particular products, e.g. there are particular stores for international products. During the past years, more consumers are opening up for online food purchases es well.

Insights into a national typic grocery structure

Insights into the grocery structure and shopping behavior in China (Mainland) and Hong Kong (SAR) Retail structure (4/6)

The grocery structure in China (Mainland) is characterized by hypermarkets, convenience stores and discounters.

One specialty of Chinese shopping behavior is the fact that often elder family members do the grocery shopping for their families, because the young people are very busy. Typical shopping days in China are on the weekend. Consumers value international brands for their high quality and lower prices

Product and service ownership of consumers

Consumer behavior: product ownership

Smartphones are the most frequently used product in China (Mainland)

75.2%

58.6%

49.6%

42.8% 45.0%

28.3%

34.7% 34.6%

Landline internet or telephone

Smartphone Mobile Internet or telephone

Health insuranceElectricity supplierBank InsuranceCar

Note: Data refers to China (Mainland) Question: “Which of these products and services do you own / use?”; Multi Pick; n=1,045 Source: Statista Global Consumer Survey, as at August 2018

https://www.statista.com/customercloud/global-consumer-survey

Brand awareness

Consumer behavior: brands

Note: Data refers to China (Mainland) Question: Top 3 brand awareness by category; “In which of these categories do you pay particular attention to brands?”; Multi pick; n=1,045 Source: Statista Global Consumer Survey, as at August 2018

Consumers in China (Mainland) value smartphone brands the most

61.6%

37.4%

22.4%

30.0%

36.6%

19.3% 19.0% 19.6%

9.0%

19.4%

6.1%

55.9% 53.3%

22.3% 19.2%

34.3%

48.7%

23.1%

15.7%

35.1%

15.4%

22.9%

13.6%

Cosmetics and

bodycare

Smartphones Clothing and Shoes

TV and HiFi Vehicles Household appliances

Food and non- alcoholic

drinks

Alcoholic drinks

Bags and accessories

Detergents and

cleaning products

Furniture Toys and baby

products

19.0%

Female

Male

https://www.statista.com/customercloud/global-consumer-survey

Digital expenditures1 as share of consumer spending per capita in 20192

Consumer behavior: digital expenditures

1: Including all revenues generated within the eCommerce, eTravel, eServices, Digital media and Connected car markets 2: Regions only include countries listed in the Digital Market Outlook Source: Statista Digital Market Outlook 2018

With US$740,421.8m and a share of 73.6%, eCommerce generates the highest digital revenues

18.3%

AustraliaAfrica & Middle East

2.8%

Asia China South America

Europe North America

10.7%

4.4% 5.8%

2.4%

6.3%

Total digital revenues1 in this country and breakdown in 2019

73.6%

17.9%

0.4% 2.8% 5.2%

Connected car

Digital media

eServices

eTravel

eCommerce

US$1,005.7bn

▪ In Asia, the digital expenditures as a share of consumer spending per capita reach 10.7% in 2019

▪ In China, the revenue in the eCommerce market amounts to US$740,421.8m in 2019

▪ The eServices market generates revenues of US$52,798.6m in 2019

▪ In the eTravel market, 2019 revenues add up to US$180,441.7m

▪ The market for Connected cars produces a revenue of US$4,049.7m in 2019

▪ Revenue in the Digital media market amounts to US$28,010.8m in 2019

Highlights

Saturated

eCommerce revenue growth, ARPU1 in US$ and penetration2 in East Asia & Pacific and regions in 2019

eCommerce: overview (1/2)

1: ARPU = average revenue per user 2: Share of active paying customers from the total population 3: Countries with a GDP per capita lower than US$16,000 are excluded 4: Countries with a GDP per capita higher than US$16,000 are excluded Source: Statista Digital Market Outlook 2019

950 25

30 45

9050 65 7060 75

8055

Malaysia

Philippines

eCommerce penetration in %

Mongolia

Myanmar

Brunei Darussalam

New Zealand

Sub-Saharan Africa

Singapore

World South Korea

Latin America & Caribbean

Thailand

Timor-Leste Australia

Vietnam

Middle East & North Africa

North America

Europe3

Cambodia

East Asia & Pacific

China (Mainland)

Eastern Europe & Central Asia

Indonesia

South Asia

Japan

Laos

eCommerce revenue growth 2018-2019 in % ARPU: US$250

MatureEmerging

Delayed

Regional averages

Compared to its region, eCommerce penetration is low and growth is below average

XXX Payment methods

eCommerce in China (Mainland)

In China (Mainland), eCommerce has been growing immensely during the last years. The majority of the population is accustomed to buy most of their life-necessities from online stores. Even cars and houses were bought online nowadays. People are getting used to eCommerce and young people are likely to choose online stores as their first choice, unless they can not find the commodities or services they are looking for.

eCommerce: overview (2/4)

Insights into the eCommerce structure in China (Mainland)

Note: Information based on Statista Fact Check Source: Statista 2019

E-wallet credit cards

direct debits

bank transfer

invoice cash other

     

Delivery characteristics in this country

There are differences concerning the duration of delivery between large cities and rural areas. Deliveries in rural areas often take longer than in urban areas.

Selected delivery providers in this country

▪ FedEx

▪ SF Express

▪ ZJS Express

▪ EMS

Selected online shops in China (Mainland):

▪ Fashion: Tmall

▪ Electronics & Media: Taoboa

▪ Food & Personal Care: JD

▪ Furniture & Appliances: Taoboa, Tmall

▪ Toys, Hobby & DIY: Taoboa, Tmall, JD

XXX Payment methods

eCommerce in Hong Kong (SAR)

In Hong Kong (SAR), the eCommerce is getting more popular. One of the main reasons is the development of a repayment system which people are more confident with nowadays. And with the increase of payment methods such as Alipay, online stores are more willing to enable those payments systems. Additionally, the delivery support has improved. Finally the development of social media plays an important role: people can set up online stores without much cost. This why there are a lot of individual Instagram and Facebook stores in Hong Kong.

eCommerce: overview (3/4)

Insights into the eCommerce structure in Hong Kong (SAR)

1: WeChat Pay Note: Information based on Statista Fact Check Source: Statista 2019

E-wallet credit cards

direct debits

bank transfer

invoice cash other1

     

Delivery characteristics in this country

n.a.

Selected delivery providers in this country

▪ Ztore

▪ ParknShop

▪ Wellcome

▪ Hong Kong Post



Selected online shops in Hong Kong (SAR):

▪ Fashion: Zalora, Zara

▪ Electronics & Media: Mongkok Computer Centre

▪ Food & Personal Care: Ztore, Sasa

▪ Furniture & Appliances: IKEA, MyConcept

▪ Toys, Hobby & DIY: Toys R Us, Toyzone

eCommerce revenues are expected to have a positive annual average growth of 10.1% up to 2023

Note: Data refers to China (Mainland) 1: CAGR: Compound Annual Growth Rate / average growth rate per year Question: Top 5 product categories purchased primarily online; “Which of these products do you mostly buy or order online?“; multi pick; n=1,045 Source: Statista Digital Market Outlook 2018, Statista Global Consumer Survey, as at August 2018

eCommerce: revenue projection

eCommerce revenues in million US$

20.0%

47.0% 47.0%

41.0%

29.0%

37.0%

68.0%

57.0%

26.0% 23.0%

Bags & accessories

Clothing Shoes Consumer electronics

Household appliances

Male Female

131,653 198,069

109,757

168,397

79,297 153,957

209,290 291,109

431,057

53,946

2019 2023

740,422

1,086,111 +10.1%1

Products mostly bought online

Fashion

Toys, hobby & DIYElectronics & media

Food & personal care

Furniture & appliances

https://www.statista.com/customercloud/global-consumer-survey

eCommerce: selected store profile

Selected online store: Taobao

1: Gift card, Convenience Store Note: Information based on Statista fact check Source: https://world.taobao.com/ 2018

Launch year: 2003

Company: Alibaba Group Holdings, Ltd.

Headquarter: Hangzhou

Coverage of eCommerce categories

Payment methods

Logistics providers

SF Express, Not Named

Fashion Electronics

& media

Food & personal

care

Furniture & appliances

Toys, hobbys & DIY

 

E-Wallets Cards Direct debits

Bank transfer

Invoice Cash Other1

 



  

 

https://world.taobao.com/

The total FinTech transaction value is forecast to grow by 116% from 2019 to 2023

Note: Data refers to China (Mainland) 1: CAGR: Compound Annual Growth Rate/ average growth rate per year Source: Statista Digital Market Outlook 2018

Segment CAGR1 2019-2023

FinTech: transaction projection

FinTech transaction value in million US$

1,585,555

3,081,261

883,251

222,404

341,220

6,405

20232019

184,829

11,547

1,999,192

4,317,279

+21.2%1

Digital payments

Personal finance

Alternative lending

Alternative financing

15.9%

11.3%

47.9%

18.1%

Highlights

▪ The transaction value in the FinTech market amounts to US$1,999,192.3m in 2019

▪ The transaction value is expected to show an annual growth (CAGR 2019-2023) of 21.2%, resulting in a volume of US$4,317,279.1m in 2023

▪ The largest segment is the digital payments segment with a volume of US$1,585,554.8m in 2019

▪ User penetration in digital payments is 73.7% in 2017 and is expected to hit 81.0% in 2023

▪ The average transaction value per user in digital payments amounts to US$1,548.57 in 2019

http://databank.worldbank.org/data/source/world-development-indicators

INFRA- STRUCTURE

▪ Digital

▪ Transport

▪ Electrical

Internet penetration1 in 2018

Digital infrastructure (1/2)

Mobile phone subscriptions1 per 100 inhabitants in 2018

Fixed broadband subscriptions1 per 100 inhabitants in 2018

Note: Data refers to China (Mainland) 1: See glossary for definitions Source: World Bank World Development Indicators 2018, Statista 2018

56.9% used the internet and there were 105.6 mobile cellular subscriptions per 100 people

56.9%

84.1%

58.7%

China United States East Asia & Pacific

106

124 125

China United States East Asia & Pacific

Internet penetration1 in 2018

Digital infrastructure (2/2)

1: See glossary for definitions 2: Democratic Republic of the Congo Source: World Bank World Development Indicators 2018, Statista 2018

China (Mainland) had the 83th highest internet penetration in the world in 2018

# Country/region Penetration

31 Latvia 84.4%

32 Slovakia 84.2%

33 United States 84.1%

34 France 83.6%

35 Cyprus 82.6%

36 Slovenia 81.9%

37 Czechia 81.7%

38 Argentina 81.6%

39 Kuwait 81.2%

40 Russia 81.2%

41 Belarus 81.1%

42 Hungary 81.0%

43 Lithuania 80.6%

44 Croatia 80.4%

45 Poland 79.5%

46 Malaysia 79.2%

47 Oman 78.9%

48 Greece 78.6%

49 Portugal 78.5%

50 Malta 78.5%

51 Moldova 77.9%

52 Lebanon 77.3%

53 Serbia 77.0%

54 Armenia 76.7%

55 Costa Rica 74.9%

56 Kazakhstan 73.2%

57 Macedonia 72.7%

58 Dominican Republic 72.1%

59 Montenegro 71.1%

60 Bosnia and Herzegovina 71.1%

# Country/region Penetration

61 Djibouti 69.4%

62 Uruguay 68.0%

63 Jordan 67.9%

64 Bulgaria 66.5%

65 Turkey 66.3%

66 Iran 65.9%

67 Mexico 65.8%

68 Brazil 65.6%

69 Philippines 65.4%

70 Romania 65.2%

71 Albania 64.6%

72 Morocco 64.4%

73 Italy 63.9%

74 South Africa 63.8%

75 Colombia 63.7%

76 Venezuela 63.5%

77 Bhutan 62.8%

78 Paraguay 62.6%

79 Ecuador 60.2%

80 Georgia 59.4%

81 Thailand 58.8%

82 Botswana 58.3%

83 China (Mainland) 56.9%

84 Vietnam 56.7%

85 Belize 56.6%

86 Gabon 54.1%

87 Ukraine 53.9%

88 Uzbekistan 53.6%

89 Iraq 53.6%

90 Algeria 52.4%

# Country/region Penetration

91 Bolivia 51.0%

92 Tunisia 50.9%

93 Cuba 50.1%

94 Cambodia 50.0%

95 Panama 49.3%

96 Nigeria 47.1%

97 Indonesia 45.4%

98 Ivory Coast 45.3%

99 Peru 45.1%

100 Jamaica 44.8%

101 Egypt 43.6%

102 Suriname 43.5%

103 Guatemala 41.4%

104 Ghana 40.8%

105 Cameroon 37.8%

106 India 35.7%

107 Namibia 35.4%

108 Kyrgyzstan 34.2%

109 Guyana 33.3%

110 Honduras 32.1%

111 El Salvador 31.9%

112 Syria 31.9%

113 Myanmar 31.7%

114 Senegal 30.0%

115 Sudan 29.4%

116 Timor-Leste 28.0%

117 Zambia 27.3%

118 Equatorial Guinea 27.2%

119 Zimbabwe 26.1%

120 Nicaragua 25.9%

# Country/region Penetration

1 Norway 98.4%

2 Denmark 98.3%

3 Bahrain 98.1%

4 Qatar 97.9%

5 United Kingdom 97.1%

6 Sweden 96.7%

7 Netherlands 95.3%

8 Canada 94.7%

9 United Arab Emirates 94.7%

10 Luxembourg 94.7%

11 New Zealand 94.3%

12 South Korea 94.3%

13 Switzerland 94.2%

14 Iceland 94.0%

15 Germany 93.5%

16 Brunei Darussalam 92.6%

17 Japan 92.5%

18 Estonia 91.9%

19 Australia 91.5%

20 Finland 91.4%

21 Belgium 91.2%

22 Hong Kong (SAR) 90.0%

23 Chile 89.4%

24 Singapore 89.0%

25 Ireland 88.6%

26 Austria 88.4%

27 Spain 87.2%

28 Azerbaijan 85.4%

29 Israel 85.3%

30 Saudi Arabia 84.8%

# Country/region Penetration

121 Yemen 25.2%

122 Mongolia 23.8%

123 Laos 23.0%

124 Bangladesh 22.0%

125 Mozambique 21.5%

126 Tajikistan 21.2%

127 Rwanda 21.2%

128 Uganda 20.4%

129 Libya 19.6%

130 Turkmenistan 19.5%

131 Gambia 19.5%

132 Nepal 19.3%

133 Ethiopia 19.3%

134 Kenya 18.8%

135 Tanzania 16.5%

136 Pakistan 15.4%

137 Angola 15.1%

138 Burkina Faso 14.1%

139 Malawi 13.4%

140 Mali 13.3%

141 Sierra Leone 12.3%

142 Haiti 12.0%

143 Niger 11.7%

144 Afghanistan 10.6%

145 Republic of the Congo 8.8%

146 Congo (Dem Rep.)2 7.9%

147 South Sudan 7.8%

148 Chad 6.1%

149 Somalia 1.7%

http://databank.worldbank.org/data/source/world-development-indicators

Quality of trade and transport-related infrastructure1

Transport infrastructure

Freight transportation2

Note: Data refers to China (Mainland) 1: Logistics Performance Index (5 = high performance, 1 = low performance), see glossary for definition 2: Ton-kilometer = cargo weight transported times distance transported, TEU = Twenty-foot equivalent unit (standard-size container) 3: Container port traffic Source: World Bank World Development Indicators 2018

3.6 3.7 3.8

3.0 3.2 3.0

2012 20162014

China East Asia & Pacific

213.7 million TEU in 2017

23,323.6 million ton-km in 2017

1,920,285.0 million ton-km in 2016

Quality of trade and transport-related infrastructure was higher than the regional average

http://databank.worldbank.org/data/source/world-development-indicators

POLITICS

▪ Political profile

▪ Political environment

General information

▪ Freedom House score in 2018: 6.5 (1 = most free and 7 = least free)

▪ Head of government: Premier LI Keqiang (since 16 March 2013); Executive Vice Premiers HAN Zheng (since 19 March 2018), SUN Chunlan (since 19 March 2018), LIU He (since 19 March 2018), HU Chunhua (since 19 March 2018), Head of State XI Jinping (since 14 March 2013)

▪ Cabinet: State Council appointed by National People's Congress

Political profile

Politics in China (Mainland)

▪ The People's Republic of China is formally a multi-party state under the leadership of the Communist Party of China and 8 minor parties are also allowed to participate in the political system

▪ The Special Administrative Regions of Hong Kong and Macau, which were previously European colonies, possess multi-party systems and operate under a different political system to the rest of the People´s Republic of China

Source: Political Handbook of the World 2016-2017, CIA World Factbook, ElectionGuide, Freedom House

China (Mainland) is a people’s democracy from a socialist perspective

Political environment: rule of law

▪ When it comes to the rule of law, China (Mainland) has ranked #116 in the comparison of the 214 countries and territories covered by the World Bank Worldwide Governance Indicators in 2017

▪ Percentile rank indicates the rank among all countries and territories covered by the aggregate indicator, with 0 corresponding to the lowest, and 100 to the highest rank

▪ Rule of law refers to the influence and authority of law within society, particularly as a constraint upon behavior, including behavior of government officials

▪ This indicator captures perceptions of the extent to which the country’s/ territory’s population has confidence in reliability of legal authorities and police and the likelihood of crime and violence to occur

▪ The rule of law also measures factors such as the time and cost for resolving a commercial dispute

Source: World Bank Worldwide Governance Indicators 2018

Rule of Law in China (Mainland) in global comparison

0%-20% 21%-40% 41%-60% 61%-80% 81%-100%

Percentile rankings in rule of law in 2017

https://datacatalog.worldbank.org/dataset/worldwide-governance-indicators

Efficiency of corruption control1 in 2017

Political environment: corruption control

1: See glossary for definitions 2:Democratic Republic of the Congo Note: Ranked from strong (2.5) to weak (-2.5) by country Source: World Bank Worldwide Governance Indicators 2018

Control of corruption is rated as mediocre

# Country/region Estimate

1 New Zealand 2.2

2 Norway 2.2

3 Finland 2.2

4 Denmark 2.2

5 Sweden 2.1

6 Singapore 2.1

7 Switzerland 2

8 Luxembourg 2

9 Canada 1.9

10 Netherlands 1.9

11 United Kingdom 1.8

12 Germany 1.8

13 Iceland 1.8

14 Australia 1.8

15 Hong Kong (SAR) 1.6

16 Bhutan 1.6

17 Ireland 1.5

18 Austria 1.5

19 Japan 1.5

20 Belgium 1.5

21 United States 1.4

22 Uruguay 1.3

23 France 1.3

24 Estonia 1.2

25 UAE 1.1

26 Chile 1

27 Portugal 0.9

28 Israel 0.8

29 Slovenia 0.8

30 Botswana 0.8

# Country/region Estimate

31 Cyprus 0.8

32 Georgia 0.7

33 Malta 0.7

34 Qatar 0.7

35 Poland 0.7

36 Brunei Darussalam 0.7

37 Rwanda 0.6

38 Czechia 0.6

39 Lithuania 0.6

40 Latvia 0.5

41 Spain 0.5

42 South Korea 0.5

43 Costa Rica 0.5

44 Saudi Arabia 0.4

45 Namibia 0.3

46 Cuba 0.3

47 Jordan 0.3

48 Oman 0.2

49 Slovakia 0.2

50 Italy 0.2

51 Croatia 0.2

52 Hungary 0.1

53 Malaysia 0

54 South Africa 0

55 Romania 0

56 Senegal -0.1

57 Montenegro -0.1

58 Tunisia -0.1

59 Burkina Faso -0.1

60 Morocco -0.1

# Country/region Estimate

61 Greece -0.1

62 Bahrain -0.1

63 Bulgaria -0.2

64 Jamaica -0.2

65 Suriname -0.2

66 Turkey -0.2

67 Ghana -0.2

68 India -0.2

69 Indonesia -0.3

70 Argentina -0.3

71 Belarus -0.3

72 China (Mainland) -0.3

73 Belize -0.3

74 Macedonia -0.3

75 Kuwait -0.3

76 Colombia -0.4

77 Serbia -0.4

78 Thailand -0.4

79 Albania -0.4

80 Mongolia -0.5

81 Philippines -0.5

82 Tanzania -0.5

83 Peru -0.5

84 El Salvador -0.5

85 Guyana -0.5

86 Bosnia and Herz. -0.5

87 Ivory Coast -0.5

88 Brazil -0.5

89 Zambia -0.5

90 Panama -0.5

# Country/region Estimate

91 Timor-Leste -0.5

92 Egypt -0.5

93 Ethiopia -0.6

94 Armenia -0.6

95 Myanmar -0.6

96 Vietnam -0.6

97 Sierra Leone -0.6

98 Ecuador -0.6

99 Algeria -0.6

100 Mali -0.6

101 Djibouti -0.6

102 Niger -0.6

103 Malawi -0.7

104 Bolivia -0.7

105 Gambia -0.7

106 Honduras -0.7

107 Paraguay -0.7

108 Dominican Republic -0.7

109 Guatemala -0.7

110 Nepal -0.7

111 Pakistan -0.8

112 Ukraine -0.8

113 Moldova -0.8

114 Gabon -0.8

115 Iran -0.8

116 Kazakhstan -0.8

117 Bangladesh -0.8

118 Mozambique -0.9

119 Nicaragua -0.9

120 Azerbaijan -0.9

# Country/region Estimate

121 Russia -0.9

122 Mexico -0.9

123 Laos -0.9

124 Kenya -1

125 Lebanon -1

126 Uganda -1

127 Kyrgyzstan -1.1

128 Nigeria -1.1

129 Uzbekistan -1.2

130 Cameroon -1.2

131 Haiti -1.2

132 Zimbabwe -1.3

133 Cambodia -1.3

134 Rep. of the Congo -1.3

135 Tajikistan -1.3

136 Venezuela -1.4

137 Iraq -1.4

138 Angola -1.4

139 Congo (Dem Rep)² -1.4

140 Chad -1.4

141 North Korea -1.5

142 Turkmenistan -1.5

143 Afghanistan -1.5

144 Sudan -1.5

145 Syria -1.6

146 Libya -1.6

147 Yemen -1.6

148 South Sudan -1.7

149 Somalia -1.7

150 Equatorial Guinea -1.8

https://datacatalog.worldbank.org/dataset/worldwide-governance-indicators

Political environment: regulatory quality

▪ In 2017, China (Mainland) ranked #108 in Regulatory Quality out of 214 countries and territories covered by the Worldwide Governance Indicators

▪ It comes #13 when compared to other 18 countries and territories in its region East Asia & Pacific

▪ Percentile rank indicates the country’s/ territory’s rank among all countries and territories covered by the aggregate indicator, with 0 corresponding to the lowest, and 100 to the highest rank

▪ Regulations are the rules that govern the everyday life of a country. Regulatory quality captures the ability of the government to create and implement policies and procedures that support economic growth and social welfare

Source: World Bank Worldwide Governance Indicators 2018

Regulatory quality in China (Mainland) is on a middle level

Percentile rankings in regulatory quality in East Asia & Pacific in 2017

0%-20% 21%-40% 41%-60% 61%-80% 81%-100%

https://datacatalog.worldbank.org/dataset/worldwide-governance-indicators

Governance against political instability and threat of violence/terrorism in 2017

Political environment: governance

1: Democratic Republic of the Congo Note: Ranked from strong (1.5) to weak (-3).. This indicator measures perceptions of the likelihood of political instability and/or politically- motivated violence, including terrorism Source: World Bank Worldwide Governance Indicators 2018

Moderate risks from political instability and threat of violence or terrorism

# Country/region Estimate

1 New Zealand 1.5

2 Singapore 1.5

3 Iceland 1.4

4 Luxembourg 1.3

5 Malta 1.3

6 Switzerland 1.2

7 Brunei Darussalam 1.2

8 Norway 1.2

9 Bhutan 1.1

10 Japan 1.1

11 Canada 1.1

12 Portugal 1.1

13 Finland 1.1

14 Uruguay 1.1

15 Austria 1.0

16 Botswana 1.0

17 Ireland 1.0

18 Czechia 1.0

19 Sweden 1.0

20 Netherlands 0.9

21 Australia 0.9

22 Slovenia 0.9

23 Slovakia 0.9

24 Denmark 0.9

25 Hong Kong (SAR) 0.8

26 Mongolia 0.8

27 Hungary 0.8

28 Lithuania 0.8

29 Croatia 0.7

30 Oman 0.7

# Country/region Estimate

31 Cuba 0.7

32 Estonia 0.7

33 Namibia 0.7

34 United Arab Em. 0.6

35 Cyprus 0.6

36 Germany 0.6

37 Qatar 0.5

38 Poland 0.5

39 Costa Rica 0.5

40 Latvia 0.5

41 Laos 0.4

42 Belgium 0.4

43 Albania 0.4

44 Panama 0.4

45 Chile 0.4

46 Bulgaria 0.4

47 Vietnam 0.3

48 United States 0.3

49 South Korea 0.3

50 Spain 0.3

51 United Kingdom 0.3

52 Jamaica 0.3

53 Italy 0.2

54 France 0.2

55 Argentina 0.2

56 Cambodia 0.2

57 Malaysia 0.2

58 Dominican Republic 0.2

59 Suriname 0.1

60 Paraguay 0.1

# Country/region Estimate

61 Zambia 0.1

62 Serbia 0.1

63 Ghana 0.1

64 Romania 0.1

65 Belize 0.1

66 Rwanda 0.0

67 Sierra Leone 0.0

68 Timor-Leste 0.0

69 Belarus 0.0

70 Kazakhstan 0.0

71 Montenegro 0.0

72 Guyana 0.0

73 Kuwait 0.0

74 Senegal 0.0

75 Nicaragua 0.0

76 Gabon -0.1

77 Ecuador -0.1

78 Greece -0.1

79 Equatorial Guinea -0.1

80 Turkmenistan -0.1

81 Gambia -0.2

82 Moldova -0.2

83 El Salvador -0.2

84 Macedonia -0.2

85 China (Mainland) -0.3

86 Peru -0.3

87 South Africa -0.3

88 Malawi -0.3

89 Uzbekistan -0.3

90 Angola -0.3

# Country/region Estimate

91 Bolivia -0.3

92 Georgia -0.4

93 Bosnia and Herzeg. -0.4

94 Brazil -0.4

95 Morocco -0.4

96 Kyrgyzstan -0.4

97 North Korea -0.5

98 Indonesia -0.5

99 Rep. of the Congo -0.5

100 Jordan -0.5

101 Honduras -0.6

102 Uganda -0.6

103 Guatemala -0.6

104 Tanzania -0.6

105 Saudi Arabia -0.6

106 Mexico -0.6

107 Nepal -0.7

108 Tajikistan -0.7

109 Russia -0.7

110 Haiti -0.7

111 Armenia -0.7

112 Djibouti -0.7

113 Thailand -0.8

114 Azerbaijan -0.8

115 Zimbabwe -0.8

116 Colombia -0.8

117 India -0.8

118 Israel -0.9

119 Burkina Faso -0.9

120 Iran -0.9

# Country/region Estimate

121 Bahrain -0.9

122 Algeria -1.0

123 Mozambique -1.0

124 Tunisia -1.1

125 Myanmar -1.1

126 Kenya -1.1

127 Cameroon -1.1

128 Ivory Coast -1.1

129 Venezuela -1.2

130 Philippines -1.2

131 Bangladesh -1.2

132 Niger -1.3

133 Chad -1.3

134 Egypt -1.4

135 Lebanon -1.6

136 Ethiopia -1.7

137 Turkey -1.8

138 Ukraine -1.9

139 Mali -1.9

140 Nigeria -1.9

141 Sudan -2.0

142 Congo (Dem Rep)1 -2.3

143 Libya -2.3

144 Somalia -2.3

145 Iraq -2.3

146 Pakistan -2.4

147 South Sudan -2.5

148 Syria -2.6

149 Afghanistan -2.8

150 Yemen -2.9

https://datacatalog.worldbank.org/dataset/worldwide-governance-indicators

APPENDIX

▪ Data description and methods

▪ Glossary

▪ Authors

Data sources

The Statista Country Reports present quantitative data from various private and public sources of information. These sources include the International Monetary Fund, the World Bank, the United Nations, the OECD, the World Economic Forum, the International Labour Organization, the CIA World Factbook, the Election Guide, the Freedom House, the Political Handbook of the World and Statista itself. The data sources are indicated in footnotes throughout the report.

Forecasts and estimates

Certain diagrams within this Country Report include estimates or forecast values for the years 2017 to 2058. Missing datapoints in time series are subjected to interpolation when necessary. Estimated values and their sources are indicated in footnotes throughout the report.

Real GDP calculation

A country's real GDP is an inflation-adjusted GDP assessment reflecting its net growth. It can be used to compare economy sizes across countries. The data in this report are presented in U.S. dollars and maintain the growth rates of the real GDP series. The data are expressed in the base year of each country's national accounts, the year is country specific. For more information please refer to World Economic Outlook Database FAQ.

Difference between current and constant US$

Data reported in current US$ reflect the value the currency has in a particular year. Current data series are influenced by the effect of price inflation and differences in exchange rates and the comparability of growth rates between countries is limited.

Data expressed in constant US$ reflect the value of a currency in a particular base year. The individual base year listed in a country’s national accounts differs from country to country. Constant series are used to measure the true growth of a series by adjusting for the effects of price inflation.

Data description and methods (1/2)

Methodology and data used in this report

https://www.imf.org/external/pubs/ft/weo/faq.htm#q3c

Business culture data

The data concerning the country-specific business cultures were collected between January 5 and February 19, 2019. In order to get reliable insights into the country-specific business cultures, solely people with business experience in the respective country were included in the survey.

The survey sample consists of 381 participants for a total of 127 countries. Due to the small sample size, the information presented in this report gives the reader a qualitative rough impression of the business culture in a country and cannot always be generalized.

Statista Fact Check

The Statista Fact Check of international retail and eCommerce structures was carried out between January 5 and February 19, 2019. In order to collect information about the national retail and eCommerce characteristics, only people living in the country of interest were asked to participate in the Fact Check.

The Statista Fact Check includes 254 participants and covers 127 countries worldwide. The information presented by the Statista Fact Check gives the reader an impression of the retail and eCommerce structures within the country, but cannot always be generalized.

Determination of retail market development stages

The development stages of the retail markets were identified based on the specific features of each individual retail market. In cases where only two out of three features qualified a country for a certain development stage, the country was placed in the transition zone or at the beginning of the higher development stage. For instance, in Egypt international chains operate in rural areas as well as medium-sized and large cities and the grocery market is characterized by international, national and independent store ownership (all indicators for a well-developed retail market). But since there is no possibility to pay via smartphones but only via traditional and electronic payment methods (indicator for a maturing market), Egypt was assigned an early well-developed retail market stage.

Data description and methods (2/2)

Methodology and data used in this report

Central bank interest rates: The central bank policy rate (CBPR) is the interest rate that is used by central banks to implement or signal their monetary policy stance. It is set to influence the economy (e.g. consumer prices, exchange rate or credit expansion, among others). It also establishes the levels of the rest of the interest rates in the economy as most private banks obtain their money from the central banks at that rate.

Constant US$: Data expressed in constant US$ show the data for each year in the value of a particular base year. The base year of each country's national accounts is country specific. Constant series are used to measure the true growth of a series by adjusting for the effects of price inflation.

Control of corruption: Perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.

Convenience store: A convenience store sells convenience goods (e.g. frequently purchased inexpensive goods) and usually opens from early hours to late at night.

Glossary (1/4)

Current US$: Data reported in current US$ reflect the value the currency has in a particular year. Current data series are influenced by the effect of price inflation and differences in exchange rates, and the comparability of growth rates between countries is limited.

Discounter: A discounter is a department store which offers items at a lower price than other retail stores.

Disposable income: Gross national disposable income may be derived from gross national income by adding all current transfers in cash or in kind, receivable by resident institutional units from non- resident units, and subtracting all current transfers in cash or in kind payable by resident institutional units to non-resident units.

Ease of doing business score: The ease of doing business score captures the gap of each economy from the best regulatory performance observed across all economies considered. An economy's ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance.

Electronic payment method: Electronic payment methods combine debit and credit card payments.

Glossary of terms

Expense (% of GDP): Expense is cash payments for operating activities of the government in providing goods and services. It includes compensation of employees (such as wages and salaries), interest and subsidies, grants, social benefits, and other expenses such as rent and dividends.

Fiscal deficit/surplus: Fiscal deficit occurs when government expenses exceed revenues. When revenues exceed expenses, there is a fiscal surplus.

Fixed broadband subscriptions: Fixed subscriptions to high- speed access to the public internet at downstream speeds equal to or greater than 256 kbit/s.

Foreign direct investment: Foreign direct investment is an investment made by a resident enterprise in one economy (direct investor or parent enterprise) with the objective of establishing a lasting interest in an enterprise that is resident in another economy.

General government gross debt: Gross government debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor (government) to the creditor at a date or dates in the future, such as loans, insurance, pensions and debt securities.

Glossary (2/4)

Government expense: Expense is cash payments for operating activities of the government in providing goods and services. It includes compensation of employees (such as wages and salaries), interest and subsidies, grants, social benefits, and other expenses such as rent and dividends.

Government revenue: Revenue is cash receipts from taxes, social contributions, and other revenues such as fines, fees, rent, and income from property or sales. Grants are also considered as revenue but are excluded here.

Gross domestic product: Gross domestic product is the expen- diture on goods and services by residents in the form of consumption expenditures, gross capital formation and exports minus imports.

Handcart or pavement vendors: Handcart or pavement vendors are street vendors, which sell products without a solid location or building.

Hypermarket: A hypermarket is a very large self-service warehouse that combines the features of a supermarket, department store, discount store and specialty store in one location.

Independent, owner-based store: An independent, owner- based store is a small store with a single or up to three locations. Usually, the store is owned by an individual or a two-person partnership.

Glossary of terms

Inflation: The rate of inflation is the percent change in the average consumer price index (CPI). The average CPI is a measure of a country's average level of prices based on the cost of a typical basket of consumer goods and services in a given period.

Internet penetration: Share of individuals in a country who have used the Internet (from any location) in the last 3 months.

Labor force: The labor force is the sum of persons in employment plus persons in unemployment. Together, these two groups of the population represent the current supply of labor for the production of goods and services taking place in a country through market transactions in exchange for remuneration.

Large city: A large city is characterized by more than 100,000 inhabitants.

Logistics performance index: Logistics professionals' perception of a country's quality of trade and transport-related infrastructure (e.g. ports, railroads, roads, information technology), on a scale ranging from

1 (very low) to 5 (very high). Scores are averaged across all respondents.

Medium-sized city: A medium-sized city has a population between 20,000 and 100,000 people.

Glossary (3/4)

Merchandise trade: Goods which add or subtract from the stock of material resources of a country by entering (imports) or leaving (exports) its economic territory.

Mobile payment method: Mobile payment means the use of smartphones to pay at a grocery store.

Mobile phone subscriptions: Subscriptions to a public mobile telephone service that provide access to the PSTN using cellular technology.

Net official development assistance: Net official development assistance (ODA) consists of disbursements of loans made on concessional terms (net of repayments of principal) and grants by official agencies of the members of the Development Assistance Committee (DAC), by multilateral institutions, and by non-DAC countries to promote economic development and welfare in countries and territories in the DAC list of ODA recipients. It includes loans with a grant element of at least 25 percent (calculated at a rate of discount of 10 percent).

Real GDP: Real gross domestic product (GDP) is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year, expressed in base-year prices, and is often referred to as "constant-price", "inflation-corrected" GDP or "constant dollar GDP". Unlike nominal GDP, real GDP can account for changes in price level and provide a more accurate figure of economic growth.

Glossary of terms

Revenue, excluding grants (% of GDP): Revenue is cash receipts from taxes, social contributions, and other revenues such as fines, fees, rent, and income from property or sales. Grants are also considered as revenue but are excluded here.

Rural area: A rural area is characterized by towns or villages of less than 20,000 residents.

Trade in commercial services: Trade in services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer across country borders.

Traditional payment method: The traditional payment method combines cash and check payments.

Unemployment: Unemployment refers to the share of the labor force that is without work but available for and seeking employment.

Value added: Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources.

Glossary (4/4)

Glossary of terms

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