For the year ahead – 2018 to some, and the Year of the Dog to others – we share our annual Political, Economic, and Business prognostications for China.

Executive Summary:

• Xi Jinping enters the Year of the Dog more powerful than any leader since perhaps Deng Xiaoping. Centralization of power and enhancement of Party control may lead to a higher functioning PRC government ready to implement the reform agenda, but could also create more opaqueness with fewer checks on policies as power shifts to Party organizations.
• At the end of the year China will celebrate the 40th anniversary of the “Reform and Opening Up” policy. While this may be an opportune time for further opening to foreign companies, opening is likely to be very gradual and will certainly serve Chinese interests. Other trends to watch in the Year of the Dog will be the focus on improving the people’s livelihood, especially in regards to poverty and the environment, and a continuation of Supply Side Structural Reforms (SSSRs) as China seeks to reduce overcapacity and rein in financial risks.
• Business opportunities will be plentiful this year. From technology to auto and from retail to healthcare, government initiatives and private investments are driving progress and creating new opportunity for consumers and companies alike.
• As China continues to take a more active role in global leadership, promoting Belt and Road investments and championing China’s version of globalization, many companies and countries will benefit – but as China’s power grows, more countries are likely to push back amidst concerns that too much Chinese influence is undesirable.

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