1. Five Years of Recovery:A view from China.The global body for professional accountants

2. About the GECS Quarterly ACCA/IMA membersurvey 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 indexThe global body for professional accountants 3. 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 rowseats to the recoveryThe global body for professional accountants 4. Chinas recovery in (GECS) numbersMacro lagsconfidence byalmost a year!Mid-2013: Chinabegins to lagworldThe global body for professional accountantsChinas earlyrecovery wasstronger, until2010Conditions finallybottom out in Q32012 5. The global body for professional accountants 6. Chinas recovery in (GECS) contextGreen Shoots Sovereign Debt Turmoil Triumph of politics Boom & Taper New orderThe global body for professional accountantsLondon G-20QEBank bailoutsBailoutsAusterityBasel III StressTests, QE2Inflation, ArabSpring, Occupy& riotsUS AAAFukushima, PTBailoutGR PSI, LTROUS CN JP MY, PKelection, QE3, GRPSIII, ESM, W/e itTakes, ESbailout, debtceiling, fiscal cliff,Caribbean, GoldcrashCyprus bail-in,Chinacrunch, USshutdownTaper,UkraineRU-CNdeal,BRICSinstitutions,ISIS, Gaza,Argentina 7. Underlying trends in the recoveryOver by 2010Peaked in early2009 ,mid-2011Peaked in mid2011 ,mid-2012Peaked in early2010, early 2011The global body for professional accountantsPeaked inlate 2011Peaked inEarly 2012Peaked inLate 2013Peaked inLate 2013 8. The global body for professional accountants 9. What can we learn?The global body for professional accountants 10. China Uncertainties Why the slowdown? Fiscal sustainability? What next for inflation? A Minsky Moment for China? Opportunities? Foreign linkages?The global body for professional accountants 11. A new cashflow regime in the mainlandZombiecompanies?The global body for professional accountants 12. Excess capital?The global body for professional accountants 13. The investment climate: a permanent shiftFall in investmenttimed with macro,not confidence!Liquidity crunchbites, but recoverycomes soonOpportunities lagThe global body for professional accountants 14. Opportunities for Chinas companiesThe global body for professional accountants 15. Big Spender no more?AUSCHNxCYPHKThe global body for professional accountantsIRLMALMAUPAK RUSSINUKUAEUSACANGECS 100Medium80Term60GovernmentSpending40Index200-20-40-60-80-100Green shoots Sovereign Debt Crisis Turmoil Triumph of Politics Boom and Taper 16. Big Spender no more?AUSMAU PAKRUSCYP CHNxUAECANIRL HKMALUK SINUSAThe global body for professional accountantsGECS 100Medium80Term60GovernmentOverspending40Index200-20-40-60-80-100Green shoots Sovereign Debt Crisis Turmoil Triumph of Politics Boom and Taper 17. Inflation down but not outThe global body for professional accountants 18. Chinas financials still confidentThe global body for professional accountants 19. Are we any wiser now? China is rebalancing (slowly) Impact on Africa, Asia, CEE andcommodity prices Government is leading the drive awayfrom capital spending Financial liberalisation is anongoing challenge Banking sector is resilient but baddebt is a mounting risk Niche or innovation?The global body for professional accountants 20. Keep in touch!Manos SchizasEmmanouil.Schizas@accaglobal.com@ACCA_SMEwww.accaglobal.comThe global body for professional accountants