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China's Economic Development
The rise of China:
China now makes up
19%
of the world's economy
7.4%
of the world's total
Year
2000
18.7%
of the world's total
Year
2018
China's GDP as % of world
Source:
IMF as of October 2018. GDP data is based on purchasing power parity (PPP) share of world total.
China is in economic transition as it seeks
HIGHER QUALITY ECONOMIC GROWTH
Share of GDP growth:
Year 2010 vs. 2017
44.9%
66.3%
59.0%
32.0%
9.1%
Consumption
Investment
-11.2%
Net exports
2010
2017
Source:
National Bureau of Statistics PRC as of January 2019.
China's Consumption EMPOWERMENT
Private consumption is
INCREASING
and becoming a powerful force
Household consumption expenditure (RMB billion)

0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Increase of 175% since 2008

Urban
Rural
Source:
National Bureau of Statistics, as of January 2019.
Consumption is empowered by
RISING disposable incomes
China: Nationwide disposable income per capita (RMB)

15,000
18,000
21,000
24,000
27,000
12/13
12/14
12/15
12/16
12/17
Source:
National Bureau of Statistics, as of January 2019.
China's retail market is
seeing a STEADY RISE
Retail sales (USD billion)

0
1,000
2,000
3,000
4,000
5,000
6,000
2007
2009
2011
2013
2015
2017
USA
China
Foreign LUXURY BRANDS also benefit
from deep Chinese pockets
Percentage of sales by consumer nationality

5%
10%
15%
20%
25%
30%
35%
40%
China Mainland
Japan
Rest of Asia
Western Europe
North America
Others
Burberry
Gucci
LVMH
Hermes
Source:
(Left) Bloomberg, National Bureau of Statistics, US Census Bureau, as of January 2019.
(Right) HSBC Global Research as of July 2018. Sales are based on FY2018 for Burberry and FY2017 for the rest.
Focusing on INNOVATION
China's share of
PATENT APPLICATIONS
is on the rise
Patent applications as % of world

0%
5%
1%
15%
20%
25%
30%
35%
40%
45%
50%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
China
Europe
USA
Source:
WIPO as of December 2018.
China's companies are heavily
invested in AUTOMATION
Industrial robots purchased in '000 units

0
20
40
60
80
100
120
140
160
180
China
Japan
USA
Europe
2016
2017
2018
Source:
World Robotics report 2018.
Breaking into the TOP 20
of the global innovation index
2018 Global innovation index, ranking
Switzerland
1
Netherlands
2
Sweden
3
UK
4
Singapore
5
USA
6
Finland
7
Denmark
8
Germany
9
Ireland
10
Israel
11
South Korea
12
Japan
13
Hong Kong
14
Luxembourg
15
France
16
China
17
Canada
18
Norway
19
Australia
20
China's artificial intelligence
startups TOP EQUITY FUNDINGS,
outpacing the US
2017 total equity funding to AI startups, % of total
China
48%
USA
38%
Others
14%


Source:
(LeftTop) Global Innovation Index 2018.
(RightBottom) CB Insights as of June 2018.
Staying on top of the ONLINE GAME
China's social network users
could reach
725 MILLION in 3 years
Number of social network users (millions)
United States
India
China
0
200
400
600
800
725
596
371
196
221
209
2022 estimated
2017
Source:
Statista as of January 2019.
Singles Day – Alibaba earned
USD 31 BILLION of sales in one day
1 day sales for
Alibaba on Singles Day
was greater than the United States' 2018 sales for Black Friday and Cyber Monday combined
Alibaba's Singles day (11th November)
gross merchandise volume (USD billion)

5
10
15
20
25
30
35
2015
2016
2017
2018
Source:
Bloomberg, as of December 2018.
Still relatively low internet penetration in China indicating further growth potential
Source:
Statista as of December 2018.

Any forecast, projection or target where provided is indicative only and is not guaranteed in any way.
HSBC accepts no liability for any failure to meet such forecasts, projections or targets. For illustrative purposes only.