The document discusses China's economic recovery since the global financial crisis based on survey data from the Global Economic Conditions Survey (GECS). It finds that China's recovery was initially stronger than the world's until 2010 but has slowed more recently, with economic indicators bottoming out in late 2012. It also examines uncertainties around China's fiscal sustainability, inflation, and opportunities and risks for Chinese companies from its economic rebalancing.

2. Five Years of Recovery:
A view from China.
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3. About the GECS
• Quarterly ACCA/IMA member
survey since Feb 2009
• Largest of its kind in the world
• Follows 43 indicators
• Sentiment and perceptions
• Conditions on the ground
• Investment outlook
• Finance function response
• 41,000 responses, 6.5k mentions
• Good predictor of GDP, VIX index
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4. Motivation
• Crisis era: information overload
• Failure of key indices e.g. PMI
• Accounting for unlisted & informal
• Accounting for emerging markets
• Telling the world:
‘Finance professionals have front row
seats to the recovery’
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5. China’s recovery in (GECS) numbers
Macro lags
confidence by
almost a year!
Mid-2013: China
begins to lag
world
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China’s early
recovery was
stronger, until
2010
Conditions finally
bottom out in Q3
2012

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7. China’s recovery in (GECS) context
Green Shoots Sovereign Debt Turmoil Triumph of politics Boom & Taper New order
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London G-20
QE
Bank bailouts
Bailouts
Austerity
Basel III Stress
Tests, QE2
Inflation, Arab
Spring, Occupy
& riots
US AAA
Fukushima, PT
Bailout
GR PSI, LTRO
US CN JP MY, PK
election, QE3, GR
PSIII, ESM, ‘W/e it
Takes’, ES
bailout, debt
ceiling, fiscal cliff,
Caribbean, Gold
crash
Cyprus bail-in,
China
crunch, US
shutdown
Taper,
Ukraine
RU-CN
deal,
BRICS
institutions,
ISIS, Gaza,
Argentina

8. Underlying trends in the recovery
Over by 2010
Peaked in early
2009 ,
mid-2011
Peaked in mid
2011 ,
mid-2012
Peaked in early
2010, early 2011
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Peaked in
late 2011
Peaked in
Early 2012
Peaked in
Late 2013
Peaked in
Late 2013

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10. What can we learn?
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11. China Uncertainties
• Why the slowdown?
• Fiscal sustainability?
• What next for inflation?
• A Minsky Moment for China?
• Opportunities?
• Foreign linkages?
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12. A new cashflow regime in the mainland
Zombie
companies?
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13. Excess capital?
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14. The investment climate: a permanent shift
Fall in investment
timed with macro,
not confidence!
Liquidity crunch
bites, but recovery
comes soon
Opportunities lag
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15. Opportunities for China’s companies
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16. Big Spender no more?
AUS
CHNx
CYP
HK
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IRL
MAL
MAU
PAK RUS
SIN
UK
UAE
USA
CAN
GECS 100
Medium
80
Term
60
Government
Spending
40
Index
20
0
-20
-40
-60
-80
-100
Green shoots Sovereign Debt Crisis Turmoil Triumph of Politics Boom and Taper

17. Big Spender no more?
AUS
MAU PAK
RUS
CYP CHNx
UAE
CAN
IRL HK
MAL
UK SIN
USA
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GECS 100
Medium
80
Term
60
Government
Overspending
40
Index
20
0
-20
-40
-60
-80
-100
Green shoots Sovereign Debt Crisis Turmoil Triumph of Politics Boom and Taper

18. Inflation ‘down but not out’
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19. China’s financials still confident
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20. Are we any wiser now?
• China is rebalancing (slowly)
• Impact on Africa, Asia, CEE and
commodity prices
• Government is leading the drive away
from capital spending
• Financial liberalisation is an
ongoing challenge
• Banking sector is resilient but bad
debt is a mounting risk
• Niche or innovation?
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21. Keep in touch!
Manos Schizas
Emmanouil.Schizas@accaglobal.com
@ACCA_SME
www.accaglobal.com
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